Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent: (a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date, (b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation, (c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date, (d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents, (e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral, (f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise, (g) Borrower shall deliver to Lender the following items: (i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”), (ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located, (iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing, (iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and (v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10, (h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and (i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 7 contracts
Samples: Loan Agreement (Ashford Hospitality Trust Inc), Loan Agreement (Ashford Hospitality Trust Inc), Loan Agreement (Ashford Hospitality Trust Inc)
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Lender receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the The Defeasance Release Date,
Notice must be accompanied by a $10,000 non-refundable fee (d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full “Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased NoteFee”). The Defeased Note and If Lender does not receive the Undefeased Note shall have terms identical Defeasance Fee, then Borrower’s right to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents obtain Defeasance pursuant to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:that Defeasance Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)11.
Appears in 5 contracts
Samples: Multifamily Loan and Security Agreement (Steadfast Apartment REIT, Inc.), Multifamily Loan and Security Agreement (New Senior Investment Group Inc.), Multifamily Loan and Security Agreement (Steadfast Apartment REIT, Inc.)
Defeasance. Borrower shall With respect to any Mortgage Loan that contains a provision for any defeasance of mortgage collateral (a "Defeasance Loan"), the related Mortgage Note, Mortgage or other related Loan Document contained in the Mortgage File, provides that the defeasance option is not be permitted exercisable prior to a date that is at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is least two (2) years after following the Start-Up Day Closing Date and is otherwise in compliance with applicable statutes, rules and regulations governing REMICs; requires prior written notice to the holder of the last Note securitized, Borrower may voluntarily defease all Mortgage Loan of the exercise of the defeasance option and payment by Mortgagor of all related fees, costs and expenses as set forth below; requires, or permits the lender to require, the Mortgage Loan (or the portion thereof being defeased) to be assumed by a “Full Defeasance”single-purpose entity; and requires delivery of a legal opinion that the Trustee has a perfected security interest in such collateral prior to any other claim or interest. In addition, each Mortgage loan that is a Defeasance Loan permits defeasance only with substitute collateral constituting "government securities" within the meaning of Treas. Reg. Section 1.860G-2(a)(8)(i) in an amount sufficient to make all scheduled payments under the Mortgage Note (or a the portion thereof being defeased) either through and including the maturity date of the Mortgage Loan (a “Partial Defeasance”), in either case, subject or to the satisfaction first date that the Borrower can prepay the Mortgage Loan without prepayment premium, and in the case of ARD Loans, assuming the Anticipated Repayment Date is the Stated Maturity Date. Further, the Mortgage or other related Loan Document contained in the Mortgage File requires that an independent certified public accountant certify that such government securities are sufficient to make all such scheduled payments when due. To Seller's actual knowledge, defeasance under the Mortgage Loan is only for the purpose of facilitating the release of the following conditions precedent:Mortgaged Property and not as a part of an arrangement to collateralize a REMIC with obligations that are not real estate mortgages. With respect to each Defeasance Loan, the related Mortgage or other related Loan Document provides that the related Mortgagor shall (or permits the mortgagee to require the Mortgagor to)
(a) Any Full Defeasance pay all Rating Agency fees associated with defeasance (if Rating Agency approval is a specific condition precedent thereto) and all other reasonable expenses associated with defeasance, including, but not limited to, accountant's fees and opinions of counsel, or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents opinions reasonably required by Lender (i) the mortgagee under the related Loan Documents, including, if applicable, a REMIC opinion and a perfection opinion and any applicable rating agency letters confirming no downgrade or qualification of ratings on any classes in the case of a Full Defeasancetransaction. Additionally, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the for any Mortgage Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the thenCut-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be off Date Balance equal to or greater than $20,000,000, the Mortgage Loan or the related documents require (ior permit the mortgagee to require) 1.51:1.00, confirmation from the Rating Agency that exercise of the defeasance option will not cause a downgrade or withdrawal of the rating assigned to any securities backed by the Mortgage Loan and require (iior permit the mortgagee to require) the Debt Service Coverage Ratio with respect Mortgagor to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s any Rating Agency fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 5 contracts
Samples: Mortgage Loan Purchase and Sale Agreement (Banc of America Commercial Mortgage Inc., Series 2007-5), Mortgage Loan Purchase and Sale Agreement (Banc of America Commercial Mortgage Inc., Series 2007-3), Mortgage Loan Purchase and Sale Agreement (Banc of America Commercial Mortgage Inc., Series 2007-4)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Release Date and prior to the Start-Up Day Maturity Date to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen thirty (1530) days prior written notice to (or such shorter period of time if permitted by Lender in its sole discretion) but not more than ninety (90) days notice specifying (i) a Payment Date date (the “Total Defeasance Release Date”) on which the Full Total Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed Unless otherwise agreed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Lender, Borrower shall pay to Lender (A) all reasonable out-of-pocket fees payments of principal and expenses associated with interest due and payable on the Full Loan to and including the Total Defeasance or Partial DefeasanceDate (provided, as applicable that, if such Total Defeasance Date is not a Monthly Payment Date, Borrower shall also pay to Lender all payments of principal and interest due on the Loan to and including the next occurring Monthly Payment Date); (includingB) all other sums, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents,Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, Rating Agency and other fees, costs and expenses paid or incurred by Lender or its agents in connection with the Total Defeasance Event, the release of the lien of Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement, the Defeasance Collateral Account Agreement and related documentation; and (D) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of the Note or the Total Defeasance Event;
(eiii) Borrower shall either deposit with Lender an amount equal to the Total Defeasance Collateral into the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Total Defeasance Collateral;
(gv) Borrower shall deliver to Lender the following items:
(i) an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (A) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) the “Security Agreement”),
Total Defeasance Event will not result in a deemed exchange for purposes of the IRS Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes; and (C) delivery of the Total Defeasance Collateral and the grant of a security interest therein to Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law; and (ii) for execution a REMIC Opinion with respect to the Total Defeasance Event;
(vi) If required by Lender, Borrower shall deliver to Lender a release of each applicable Individual Property being defeased from Rating Agency Confirmation as to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,Total Defeasance Event;
(iiivii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivviii) an opinion Borrower shall deliver a certificate of counsel in form and substance satisfying a nationally recognized public accounting firm or any other firm acceptable to Lender certifying that the Prudent Lender Standard stating, among other things, (A) that, the Total Defeasance Collateral has been duly and validly assigned and delivered will generate monthly amounts equal to Lender and Lender has a first priority perfected security interest in and Lien on or greater than the Scheduled Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, Payments; and
(vix) Borrower shall deliver such other certificates, opinions, documents or and instruments as Lender may reasonably request including, without limitation, request.
(Ab) written confirmation from If Borrower has elected to defease the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction entire Loan and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall thereafter no longer be subject to restrictions on transfer set forth hereinthe sole source of collateral securing the Loan. In connection with a defeasance the release of the Loanlien, Borrower shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Total Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a release of lien (and related Loan Documents) for execution by Lender. Such release shall be in a Special-Purpose Entity (form appropriate in the “Successor Obligor”)jurisdiction in which the Property is located and that contains standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreementdocumentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all Legal Requirements, and (ii) will effect such release in accordance with the pledged Defeasance Collateralterms of this Agreement. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except Except as set forth hereinin this Article 2, be relieved no repayment, prepayment or defeasance of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s all or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and any portion of the Loan Documents as shall cause, give rise to a right to require, or otherwise result in, the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption release of the Loan, lien of the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Instrument.
Appears in 4 contracts
Samples: Loan Agreement (Independence Realty Trust, Inc), Loan Agreement (Independence Realty Trust, Inc), Loan Agreement (Independence Realty Trust, Inc)
Defeasance. Borrower shall Each Mortgage Loan containing provisions for defeasance of mortgage collateral provides that: defeasance may not be permitted at occur any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is earlier than two (2) years after the Start-Up Day Closing Date; and requires or provides that replacement collateral consist of U.S. “government securities,” within the last Note securitized, Borrower may voluntarily defease all meaning of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”Treasury Regulations Section 1.860G-2(a)(8)(ii), in either case, subject an amount sufficient to make all scheduled payments under the Mortgage Note when due (up to the satisfaction maturity date for the related Mortgage Loan, the Anticipated Repayment Date for ARD Loans or the date on which the related Mortgagor may prepay the related Mortgage Loan without payment of any prepayment penalty). Each Mortgage Loan containing provisions for defeasance provides that, in addition to any cost associated with defeasance, the related Mortgagor shall pay, as of the following conditions precedent:
date the mortgage collateral is defeased, all scheduled and accrued interest and principal due as well as an amount sufficient to defease in full the Mortgage Loan (aexcept as contemplated in representation (40) Any Full Defeasance or Partial Defeasance of hereof). In addition, if the related Mortgage Loan by Borrower permits defeasance, then the Mortgage Loan documents provide that the related Mortgagor shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) provide a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, REMIC opinion and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(cx) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees associated with the defeasance of the Mortgage Loan and all other reasonable expenses associated with the Full Defeasance defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection y) provide all opinions required under the related Mortgage Loan documents. No Mortgage Loan was originated with the delivery of opinion letters related intent to such Full Defeasance or Partial Defeasancecollateralize a REMIC offering with obligations that are not real estate mortgages and, as applicable)accordingly, reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with defeasance will be made solely to facilitate the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance disposition of the Loan (the “Full Defeased Note”), property or other customary commercial transaction and (ii) in the case not as part of an arrangement to collateralize a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying REMIC offering with obligations that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will are not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)real estate mortgages.
Appears in 4 contracts
Samples: Mortgage Loan Purchase Agreement (Morgan Stanley Capital I Trust 2011-C3), Mortgage Loan Purchase Agreement (Morgan Stanley Capital I Trust 2011-C3), Mortgage Loan Purchase Agreement (Morgan Stanley Capital I Trust 2011-C3)
Defeasance. Borrower shall not be permitted at (a) Provided that
(i) an amount sufficient for the payment of principal and interest on the Outstanding Bonds to the relevant Repayment Date, including any time to defease all or any portion of potential Call premium (the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Amount”), is
(ii) transferred to an account in either case, subject a financial institution acceptable to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date Bond Trustee (the “Defeasance Release DateAccount”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,and
(iii) an Officer’s Certificate being pledged and blocked in favour of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied includingBond Trustee on such terms as the Bond Trustee shall request (the “Defeasance Pledge”), without limitation, that no Event of Default has occurred and is continuing,the Issuer may request to the Bond Trustee that;
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note Issuer shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender under Clause 4.2 (General covenants) and Clause 4.3 (Information covenants);
(B) any security provided for the Bonds may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement be released and the Defeasance Collateral between Borrower Pledge shall be considered replacement of such security; and Successor Borrowerthat
(C) any guarantor may be released of its guarantee obligations pursuant to the Bond Terms.
(b) The Bond Trustee may require such further conditions, statements and legal opinions before the enforceability defeasance arrangements is implemented as the Bond Trustee may reasonably require.
(c) The Bond Trustee shall be authorised to apply any Defeasance Amount deposited on the Defeasance Account towards any amount payable by the Issuer under or pursuant to the Bond Terms on the relevant Payment Date until all obligations of the assignment documents Issuer are repaid and of discharged in full.
(d) The Bond Trustee may, if the Loan Documents as relevant Defeasance Amount cannot be finally and conclusively determined, decide the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and amount to be deposited to the Defeasance Collateral. Nothing Account in its discretion, applying such buffer amount as it deems required.
(e) A defeasance established according to this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Clause 9.3 (Defeasance) may not be reversed.
Appears in 4 contracts
Samples: Covered Bond Agreement, Covered Bond Agreement, Covered Bond Agreement
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Lender receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the The Defeasance Release Date,
Notice must be accompanied by a $10,000 non-refundable fee (d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full “Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased NoteFee”). The Defeased Note and If Lender does not receive the Undefeased Note shall have terms identical Defeasance Fee, then Borrower’s right to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents obtain Defeasance pursuant to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:that Defeasance Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)11.
Appears in 4 contracts
Samples: Multifamily Loan and Security Agreement (Steadfast Income REIT, Inc.), Multifamily Loan and Security Agreement (Steadfast Income REIT, Inc.), Multifamily Loan and Security Agreement (Steadfast Income REIT, Inc.)
Defeasance. Borrower shall not be permitted 18.2.1 The Issuer may, at its option and at any time time, elect to defease all or any portion have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Covenant Defeasance”);
(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Loan except Bondholders cash or government obligations acceptable by the Bond Trustee (the “Defeasance Pledge”) in such amounts as expressly provided will be sufficient for the payment of principal and interest on the Outstanding Bonds to Maturity Date;
(b) the Issuer shall, if required by the Bond Trustee, provide a legal opinion reasonably acceptable to the Bond Trustee to the effect that the Bondholders will not recognize income, gain or loss for income tax purposes (under US federal or Norwegian tax law, if applicable) as a result of the Defeasance Pledge and Covenant Defeasance, and will be subject to such income tax on the same amount and in this Section 2.10. Provided that the same manner and at the same times as would have been the case if the Defeasance Pledge had not occurred;
(c) no Event of Default has shall have occurred and is continuingbe continuing on the date of establishment of the Defeasance Pledge, or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 181st day after the date which is two (2) years after the Start-Up Day of establishment of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,Pledge;
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with neither the Full Defeasance Pledge nor the Covenant Defeasance results in a breach or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs violation of any loan servicer (if any) in connection with material agreement or instrument binding upon the Full Defeasance Issuer, or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,certificate of association or partnership agreement governing the Issuer;
(e) Borrower the Issuer shall either deposit with Lender an amount equal have delivered to the Defeasance Deposit, or, at Lender’s request, deliver to Lender Bond Trustee a certificate signed by the Chief Financial Officer of the GP that the Defeasance Collateral. In connection Pledge was not made by the Issuer with the foregoingintent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, Borrower appoints Lender as Borrower’s agent for hindering, delaying or defrauding any other creditors of the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,Issuer or others;
(f) Borrower the Issuer shall execute and deliver have delivered to Lender all documents the Bond Trustee any certificate or legal opinion reasonably required by Lender regarding the Covenant Defeasance or Defeasance Pledge (including certificate from the Chief Financial Officer of the GP and a legal opinion from its legal counsel to the effect that all conditions for Covenant Defeasance have been complied with; and that (i) in the case Defeasance Pledge will not be subject to any rights of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance creditors of the Loan (the “Full Defeased Note”)Issuer, and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to Defeasance Pledge will constitute a valid, perfected and enforceable security interest in favour of the Loan Bond Trustee for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all benefit of the Individual Properties as of the Closing DateBondholders, and (iiiii) RevPAR with respect to all after the 181st day following the establishment of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10Defeasance Pledge, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, funds and shall thereafter no longer assets so pledged will not be subject to restrictions on transfer set forth herein. In connection with a defeasance the effects of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally under the laws of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (jurisdiction where the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents Defeasance Pledge was established and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority corporate domicile of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Issuer.
Appears in 3 contracts
Samples: Bond Agreement (Teekay Offshore Partners L.P.), Bond Agreement (Teekay Offshore Partners L.P.), Bond Agreement (Teekay Offshore Partners L.P.)
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Xxxxxx has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Xxxxxx receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Xxxxxx will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”) for Lender’s processing of the Defeasance. If Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including does not receive the Defeasance Release Date,
(d) Borrower shall pay Fee, then Xxxxxxxx’s right to Lender all reasonable out-of-pocket fees and expenses associated with the Full obtain Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related pursuant to such Full that Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)11.
Appears in 3 contracts
Samples: Multifamily Loan and Security Agreement (Resource Apartment REIT III, Inc.), Multifamily Loan and Security Agreement (Steadfast Apartment REIT, Inc.), Multifamily Loan and Security Agreement (Steadfast Apartment REIT, Inc.)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “"Full Defeasance”") or a portion of the Loan (a “"Partial Defeasance”"), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “"Defeasance Release Date”") on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s 's giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s 's request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s 's agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “"Full Defeased Note”"), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: as
(A) one promissory note in a principal amount equal to, (1) with respect to the Partial Defeasance of Individual Properties representing, in the aggregate, the first 25% (based upon applicable Allocated Loan Amounts) to be defeased hereunder during the term of the Loan, 100% of the Allocated Loan Amount of the Individual Property to be defeased, and (2) otherwise, 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “"Defeased Note”"); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “"Undefeased Note”"). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).the
Appears in 3 contracts
Samples: Loan Agreement (Ashford Hospitality Trust Inc), Loan Agreement (Ashford Hospitality Trust Inc), Loan Agreement (Ashford Hospitality Trust Inc)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, after following the date which is two Defeasance Lockout Release Date and prior to the Open Period Start Date (2i) years after Borrower shall have the Start-Up Day right to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full DefeasanceTotal Defeasance Event”) or (ii) Borrower shall have the right to defease a portion of the Loan subject to, and in accordance with, this Section 2.8 and Section 2.9 hereof (hereinafter, a “Partial DefeasanceDefeasance Event”), in either each case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen thirty (1530) days prior written days’ notice to (or such shorter period of time if permitted by Lender in its sole discretion) but not more than ninety (90) days’ notice specifying (iA) a Payment Date date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance Event is to occur, occur and (iiB) the principal amount of the Loan to be defeased (which shall be in the event amount of the Release Amount in connection of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Event);
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(dii) Borrower shall pay to Lender (A) all reasonable out-of-pocket fees payments of principal and expenses associated with interest due and payable on the Full Loan to and including the Defeasance or Partial DefeasanceDate; (B) all other sums, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to Documents through and including the Defeasance DepositDate; (C) all escrow, orclosing, at Lender’s requestrecording, deliver to legal, appraisal, Rating Agency and other actual, reasonable fees, costs and expenses paid or incurred by Lender the Defeasance Collateral. In or its agents in connection with the foregoingDefeasance Event, Borrower appoints Lender as Borrower’s agent for the purpose release of applying the lien of Security Instrument on the Property in connection with a Total Defeasance Event (or the Release Property in connection with a Partial Defeasance Event), the review of the proposed Defeasance Collateral and the preparation of the Security Agreement and related documentation; and (D) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of the Note and/or the Defeasance Deposit to purchase the Defeasance Collateral,Event;
(fiii) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in In the case of a Partial DefeasanceDefeasance Event, Lender, at Borrower’s expense, shall prepare all necessary documents to issue sever the indebtedness evidenced by the Note into two substitute notes as follows: (A) notes, one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount defeased portion of the original Note, which Defeased Note shall be in an amount exactly equal to the Release Amount, and the other (the “Undefeased Note”)) having a principal balance equal to the undefeased portion of the original Note as of the Defeasance Date. The Defeased Note and the Undefeased Note shall have identical terms identical to as the terms of the original Note, except for the principal balance balance, and a pro rata allocation of provided that the Required Monthly Debt Service Payment. Neither a Full Payment Amount shall be apportioned ratably amongst the Defeased Note nor a and the Undefeased Note, and the Defeased Note or Defeased Notes and the Undefeased Note or Undefeased Notes shall be cross-defaulted with each other. A Defeased Note cannot be the subject of any further Defeasance Event. An Undefeased Note may be the subject of any a further defeasance; after a Partial Defeasance, all references herein and Defeasance Event in accordance with the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,terms of this Section 2.8;
(giv) Borrower shall deposit the Defeasance Collateral into the Defeasance Collateral Account and otherwise comply with the provisions of Section 2.8(d) hereof;
(v) Borrower shall execute and deliver to Lender a Security Agreement in respect of the Defeasance Collateral Account and the Defeasance Collateral;
(vi) Borrower shall deliver to Lender the following items:
an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (iA) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) if a Securitization has occurred (1) the REMIC Trust formed pursuant to such Securitization and/or any subsequent or prior Securitization of the Loan or any portion thereof or interest therein will each not fail to maintain their respective status as a “Security Agreement”),real estate mortgage investment conduit” within the meaning of Section 860D of the IRS Code as a result of a Total Defeasance Event pursuant to this Section 2.8 and (2) the Total Defeasance Event would neither (I) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.860G02(b)(2) nor (II) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the IRS Code; and (C) a New Non-Consolidation Opinion with respect to the Successor Borrower;
(iivii) for execution by Lender, Borrower shall deliver to Lender a release of each applicable Individual Property being defeased from Rating Agency Confirmation as to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,Defeasance Event;
(iiiviii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied satisfied;
(ix) Borrower shall deliver a certificate of a “big four” or other public accounting firm reasonably acceptable to Lender certifying that the Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments (or with respect to a Partial Defeasance Event, the Partial Defeasance Scheduled Defeasance Payments);
(x) Borrower shall deliver such other customary certificates, opinions, documents and instruments as Lender may reasonably request; and
(xi) Borrower shall pay all actual, reasonable costs and expenses of Lender incurred in connection with the Total Defeasance Event or Partial Defeasance Event, as applicable, including, without limitation, that no Event of Default has occurred Lender’s reasonable attorneys’ fees and is continuing,expenses and Rating Agency fees and expenses.
(ivb) an opinion of counsel in form If Borrower has elected to defease the entire Note and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may beSecurity Instrument, the other Loan Documents and the Security Agreement, together with the Total Defeasance Collateral pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and pursuant to the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, shall be relieved the sole source of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm collateral securing the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerNote, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Lender shall return to Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).unapplied
Appears in 2 contracts
Samples: Loan Agreement, Loan Agreement (Consolidated Tomoka Land Co)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Release Date and prior to the Start-Up Day Maturity Date to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(ai) Any Full Borrower shall provide Lender not less than thirty (30) days notice (or such shorter period of time if permitted by Lender in its sole discretion) but not more than ninety (90) days notice specifying a date (the “Total Defeasance Date”) on which the Total Defeasance Event is to occur;
(ii) Unless otherwise agreed to in writing by Lender, Borrower shall pay to Lender (A) all payments of principal and interest due and payable on the Loan to and including the Total Defeasance Date (provided, that, if such Total Defeasance Date is not a Monthly Payment Date, Borrower shall also pay to Lender all payments of principal and interest due on the Loan to and including the next occurring Monthly Payment Date, unless the Total Defeasance Collateral shall be sufficient to make such payments, together with all other payments required to be made hereunder); (B) all other sums, if any, due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, Rating Agency and other reasonable fees, costs and expenses paid or Partial incurred by Lender or its agents in connection with the Total Defeasance Event, the release of the Loan by lien of Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement, the Defeasance Collateral Account Agreement and related documentation; and (D) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of the Note or the Total Defeasance Event;
(iii) Borrower shall be made on deposit the Total Defeasance Collateral into the Defeasance Collateral Account and otherwise comply with the provisions of Section 2.8(d) hereof;
(iv) Borrower shall execute and deliver to Lender a Payment Date,Security Agreement in respect of the Defeasance Collateral Account and the Total Defeasance Collateral;
(v) Borrower shall deliver to Lender (i) an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (A) Lender has a legal and valid perfected first priority security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) the Total Defeasance Event will not result in a deemed exchange for purposes of the IRS Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes; and (C) delivery of the Total Defeasance Collateral and the grant of a security interest therein to Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law; (ii) a REMIC Opinion with respect to the Total Defeasance Event; and (iii) a New Non-Consolidation Opinion with respect to Successor Borrower;
(vi) Borrower shall deliver to Lender a Rating Agency Confirmation as to the Total Defeasance Event;
(vii) Borrower shall deliver an Officer’s Certificate certifying that the requirements set forth in this Section 2.8 have been satisfied;
(viii) Borrower shall deliver a certificate of a nationally recognized public accounting firm acceptable to Lender certifying that the Total Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments; and
(ix) Borrower shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request.
(b) If Borrower has elected to defease the entire Loan and the requirements of this Section 2.8 have been satisfied, the Property shall be released from the lien of the Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall be the sole source of collateral securing the Loan. In connection with the release of the lien, Borrower shall provide submit to Lender, not less than fifteen (15) days prior written notice to the Total Defeasance Date (or such shorter time as is acceptable to Lender specifying in its sole discretion), a release of lien (and related Loan Documents) for execution by Lender. Such release shall be in a form appropriate in the jurisdiction in which the Property is located and that contains standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurin compliance with all Legal Requirements, and (ii) will effect such release in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated accordance with the Full Defeasance terms of this Agreement. Except as set forth in this Article 2, no repayment, prepayment or Partial Defeasance, as applicable (including, without limitation, fees defeasance of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance all or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance portion of the Loan (shall cause, give rise to a right to require, or otherwise result in, the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Instrument.
Appears in 2 contracts
Samples: Loan Agreement (Clipper Realty Inc.), Loan Agreement (Clipper Realty Inc.)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 2 contracts
Samples: Loan Agreement (Ashford Hospitality Trust Inc), Loan Agreement (Ashford Hospitality Trust Inc)
Defeasance. Borrower The investments in the defeasance escrow relating to the Series 2016 Certificates shall not be permitted at any time limited to defease all or any portion non-callable, direct obligations of the Loan except United States of America and securities fully and unconditionally guaranteed as expressly provided in this Section 2.10to the timely payment of principal and interest by the United States of America, or as otherwise maybe authorized under State law and approved by BAM. Provided that no Event At least three (3) Business Days prior to any defeasance with respect to the Series 2016 Certificates, the Corporation or the County, as agent for the Corporation, shall deliver to BAM draft copies of Default has occurred an escrow agreement, an opinion of Special Tax Counsel regarding the validity and is continuing, after the date which is two (2) years after the Start-Up Day enforceability of the last Note securitized, Borrower may voluntarily defease all escrow agreement and the defeasance of the Loan Series 2016 Certificates, a verification report (a “Full DefeasanceVerification Report”) prepared by a nationally recognized independent financial analyst or a portion firm of certified public accountants regarding the sufficiency of the Loan (a “Partial Defeasance”)escrow fund. Such opinion and Verification Report shall be addressed to BAM and shall be in form and substance satisfactory to BAM. In addition, in either case, subject to the satisfaction of the following conditions precedentescrow agreement shall provide that:
(a) Any Full Defeasance or Partial Defeasance substitution of securities following the execution and delivery of the Loan by Borrower escrow agreement shall require the delivery of a Verification Report, an opinion of Special Tax Counsel that such substitution will not adversely affect the exclusion (if interest on the Series 2016 Certificates is excludable) from gross income of the holders of the Series 2016 Certificates of the interest on the Series 2016 Certificates for federal income tax purposes and the prior written consent of BAM, which consent will not be made on a Payment Date,unreasonably withheld.
(b) Borrower shall provide not less Neither the Corporation nor the County will exercise any prior optional redemption of Series 2016 Certificates secured by the escrow agreement or any other redemption other than fifteen (15) days prior written notice to Lender specifying mandatory sinking fund redemptions unless (i) a Payment Date (the “Defeasance Release Date”) on which right to make any such redemption has been expressly reserved in the Full Defeasance or Partial Defeasance is to occurescrow agreement and such reservation has been disclosed in detail in the official statement for the refunding Certificates, and (ii) in the event of as a Partial Defeasance, the Individual Property proposed condition to be defeased; provided, that, Borrower any such redemption there shall be required provided to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior BAM a Verification Report as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following any such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,redemption.
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Corporation and the Undefeased Note County shall have terms identical to not amend the terms of the Note, except for the principal balance and escrow agreement or enter into a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the forward purchase agreement or other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio agreement with respect to rights in the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) escrow without the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case written consent of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)BAM.
Appears in 2 contracts
Samples: Trust Agreement, Trust Agreement
Defeasance. Borrower If and when any Outstanding Certificates shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:be
(a) Any Full Defeasance By well and truly paying or Partial Defeasance of causing to be paid the Loan principal and interest and prepayment premiums (if any) evidenced by Borrower shall be made on a Payment Date,such Certificates Outstanding, as and when the same become due and payable and all Additional Rent;
(b) Borrower shall provide not less than fifteen By making an irrevocable deposit with the Trustee, in trust, at or before a scheduled payment date, of money that, together with the amounts then on deposit in the Lease Payment Fund is fully sufficient to pay such Certificates Outstanding, including all principal and interest and premium, if any, evidenced thereby and all Additional Rent;
(15c) days prior written notice By making an irrevocable deposit with the Trustee, in trust, of Defeasance Obligations, together with money, if required, in such amount as will, in the opinion of an independent certified public accountant acceptable to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which Trustee, together with the Full Defeasance or Partial Defeasance is interest to occuraccrue thereon, but without reinvestment thereof, and amounts then on deposit in the Lease Payment Fund together with the interest to accrue thereon, be fully sufficient to pay and discharge such Certificates (iiincluding all principal and interest) at their respective specified principal payment dates and pay all unpaid Additional Rent; or
(d) By making an irrevocable deposit with the Trustee, pursuant to an escrow deposit and trust agreement, of security for the payment of Lease Payments and Additional Rent as more particularly described in Section 10.1 of the Lease Agreement, said security to be held by the Trustee as agent for the Lessee to be applied by the Trustee to pay the Lease Payments and Additional Rent as the same become due and payable, pursuant to Section 10.1 of the Lease Agreement; notwithstanding that any Certificates shall not have been surrendered for payment, all obligations of the Lessor, the Trustee and the Lessee with respect to such Outstanding Certificates shall cease and terminate, except only the obligation of the Trustee to pay or cause to be paid, from Lease Payments paid by or on behalf of the Lessee from funds deposited pursuant to paragraphs (b) through (d) of this Section, to the Owners of the Certificates not so surrendered and paid all sums due with respect thereto, and in the event of a Partial Defeasancedeposits pursuant to paragraphs (b) through (d) of this Section, the Individual Property proposed Certificates shall continue to evidence direct and proportionate interests of the Owners thereof in Lease Payments pursuant to the Lease Agreement. Any funds held by the Trustee, at the time of one of the events described in paragraphs (a) through (d) of this Section, that are not required for the payment to be defeasedmade to Owners, shall first be applied to the payment of Additional Rent and, thereafter, be paid over to the Lessee, subject to Section 9.8 hereof. Any Certificate or portion thereof in Authorized Denominations may be paid and discharged as provided in this Section; provided, thathowever, Borrower that if any such Certificate or portion thereof is to be prepaid, notice of such prepayment shall be required to defease have been given in accordance with the Loan on provisions hereof or the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior Lessee shall have submitted to the Trustee instructions expressed to be irrevocable as to the date upon which such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s Certificate or portion thereof is to be prepaid and as to the giving of notice of such notice and revocation,
prepayment; provided further, that if any such Certificate or portion thereof will not be paid or prepaid as to principal within 60 days of the deposit referred to in paragraphs (cb) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
through (d) Borrower of this Section, the Trustee shall pay give notice of such deposit by first class mail to Lender the Owners. If the Lessee prepays the Lease Payments and Additional Rent in full pursuant to Article X of the Lease Agreement, makes the advance deposit required by Section 10.1 of the Lease Agreement or pays all reasonable out-of-pocket fees Lease Payments and expenses associated with Additional Rent during the Full Defeasance or Partial Defeasanceterm of the Lease Agreement as the same become due and payable, as applicable (includingall right, title and interest of the Trustee and the Lessor in and to each element of the Leased Property shall be transferred to and vested in the Lessee. Title shall be vested in the Lessee hereunder without limitation, fees the necessity for any further instrument of Rating Agencies transfer; but the Trustee and accountants, and fees incurred in connection with the delivery of opinion letters related Lessor agree to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of take any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due steps and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender record any and all documents reasonably required by Lender (i) in the case Lessee to consummate such vesting of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)title.
Appears in 2 contracts
Samples: Trust Agreement, Trust Agreement
Defeasance. Borrower shall The principal balance of this Note may not be permitted at any time to defease all prepaid in whole or any portion of the Loan in part (except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject with respect to the satisfaction application of Involuntary Payments (as defined below)) prior to the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Maturity Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, thathowever, Borrower shall be required have the right and option to defease release the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
“Trust Property” (c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) defined in the case Deed of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (iiTrust) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage Deed of Trust in a form appropriate for accordance with the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements terms and provisions set forth in this Section 2.10 the Deed of Trust (“Defeasance”). Notwithstanding the foregoing sentence, Borrower shall have been satisfied includingthe privilege to prepay the entire amount of the outstanding Debt on the first (1st) day of any of the three (3) calendar months preceding the month in which the scheduled Maturity Date occurs without Defeasance or the payment of the Yield Maintenance Premium (as defined in the Deed of Trust) or any other premium or penalty. Notwithstanding the foregoing, without limitationif prior to the scheduled Maturity Date (excluding, however, during the three (3) months preceding the scheduled Maturity Date) and during the existence of any Event of Default, Borrower shall tender payment of an amount sufficient to satisfy the Debt at any time prior to a sale of the Trust Property either through foreclosure or the exercise of the other remedies available to Lender under the Deed of Trust, such tender by Borrower shall be deemed to be voluntary and Borrower shall pay, in addition to the Debt, the greater of (a) the Yield Maintenance Premium, if any, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed would be payable in connection with a Secondary Market TransactionDefeasance, and
or (vb) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, three percent (A3%) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements unpaid principal balance of this Section 2.10,
(h) Note. In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect addition to the Undefeased Note foregoing, Borrower shall not be equal required to pay any fee or greater than (i) 1.51:1.00consideration if, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien terms and conditions of the applicable MortgageDeed of Trust, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with Lender receives (i) insurance proceeds or other payments as a defeasance result of the Loanfire or other casualties, Borrower shall assign to an entityor (ii) awards or other payments made in any condemnation or eminent domain proceedings (collectively, which entity which shall be a Special-Purpose Entity (the “Successor ObligorInvoluntary Prepayments”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent such Involuntary Prepayments are applied by Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority toward reduction of the Successor Borrower (including a non-consolidation opinion)Debt; provided, however, if an Event of Default, or an event with notice and/or the assignment and assumption passage of time would constitute an Event of Default, exists, then the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lenderto the Lender an additional amount equal to the greater of (A) the Yield Maintenance Premium, including Lender’s reasonable attorney’s fees and expensesif any, incurred in connection with Successor Borrower’s assumption that would be required if such Involuntary Prepayment had been Defeased, or (B) three percent (3%) of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Involuntary Prepayment.
Appears in 2 contracts
Samples: Deed of Trust Note (Republic Property Trust), Deed of Trust Note (Republic Property Trust)
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 44 shall apply in the event the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 44(a) and (c) below, Borrower shall have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the lien of this Instrument upon the satisfaction of the following conditions:
(a) Borrower shall not be permitted have the right to obtain Defeasance at any time to defease all or any portion of the following times:
(i) if the Loan is not assigned to a REMIC trust;
(ii) during the Lockout Period (as defined in the Note);
(iii) after the expiration of the Defeasance Period (as defined in the Note); or
(iv) after Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 6 of the Note.
(b) Borrower shall give Lender Notice (the “Defeasance Notice”) specifying a Business Day (the “Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Lender will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.
(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (the “Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate.
(i) If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations hereunder, Lender shall have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as expressly provided in Section 44(d)(ii), Borrower shall be released from all further obligations under this Section 2.1044. Provided Borrower acknowledges that no Lender will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the lien of this Instrument in reliance on the executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Instrument, of the damages Lender will incur by reason of Borrower’s default.
(ii) In the event that the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 44(d)(i) above) incurred by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.
(iii) All payments required to be made by Borrower to Lender pursuant to this Section 44 shall be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.
(e) No Event of Default has occurred and is continuing.
(f) The documents required to be delivered to Lender on or prior to the Defeasance Closing Date are:
(i) an opinion of counsel for Borrower, after in form and substance satisfactory to Lender, to the date which effect that Lender has a valid and perfected lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof;
(ii) an opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is two duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms;
(iii) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms;
(iv) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created;
(v) if Borrower designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender and to any Rating Agencies then providing ongoing ratings with respect to any Securitization, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court;
(vi) unless waived by Lender, an opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that:
(A) if, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) years after the Start-Up Day qualification and status of the last Note securitized, Borrower may voluntarily defease all REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Loan Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance, and
(B) the Defeasance will not result in a “Full Defeasancesale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder;
(vii) unless waived by Lender, a written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date;
(viii) Lender’s form of a pledge and security agreement (“Pledge Agreement”) or and financing statements which pledge and create a portion first priority security interest in the Defeasance Collateral in favor of the Loan Lender;
(ix) Lender’s form of a transfer and assumption agreement (“Partial DefeasanceTransfer and Assumption Agreement”), whereupon Borrower and any guarantor (in either each case, subject to the satisfaction of the following conditions precedent:
(aall requirements hereunder) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred relieved from liability in connection with the delivery Loan (other than any liability under Section 18 of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal this Instrument for events that occur prior to the Defeasance DepositClosing Date, or, at Lender’s request, deliver to Lender whether discovered before or after the Defeasance Collateral. In connection with the foregoing, Closing Date) and Successor Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,shall assume all remaining obligations;
(fx) Borrower shall execute and deliver to Lender Forms of all documents reasonably required necessary to release the Mortgaged Property from the liens created by Lender this Instrument and related UCC financing statements (i) in the case of a Full Defeasancecollectively, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased NoteRelease Instruments”), and each in appropriate form required by the state in which the Property is located; and
(iixi) in the case of a Partial Defeasancesuch other opinions, to issue two substitute notes certificates, documents or instruments as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note Lender may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,reasonably request.
(g) Borrower shall deliver to Lender on or prior to the following itemsDefeasance Closing Date:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the The Defeasance Collateral (the “Security Agreement”),which meets all requirements of Section 44(g)(ii) below and is owned by Borrower, free and clear of all liens and claims of third-parties;
(ii) The Defeasance Collateral must be in an amount to provide for execution (A) redemption payments to occur prior, but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date and (B) deliver redemption proceeds at least equal to the amount of principal and interest due on the Note on each Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”). The Defeasance Collateral shall be arranged such that redemption payments received from the Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments. Unless otherwise agreed in writing by Lender, a release of each applicable Individual Property being defeased from the lien pledge of the Defeasance Collateral shall be effectuated through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,laws; and
(iii) an Officer’s Certificate of Borrower certifying that All accrued and unpaid interest and all other sums due under the requirements set forth in Note, this Section 2.10 have been satisfied Instrument and under the other Loan Documents, including, without limitation, that no Event of Default has occurred and is continuing,all amounts due under Section 44(i) below, up to the Defeasance Closing Date shall be paid in full on or prior to the Defeasance Closing Date.
(ivh) If Lender permits Borrower to designate the Successor Borrower, then Borrower shall, at Borrower’s expense, designate or establish an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, accommodation borrower (A“Successor Borrower”) that, the Defeasance Collateral has been duly and validly assigned and delivered satisfactory to Lender and Lender has (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a first priority perfected security interest in and Lien on “Single Purpose Entity” to assume at the time of Defeasance Deposit and a first priority perfected security interest in and Lien on ownership of the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan liability for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as Pledge Agreement and the case may be, the other Loan Documents and (to the Security Agreement, together with the pledged Defeasance Collateralextent that liability thereunder survives release of this Instrument). The Borrower shall pay to Successor Obligor shall assume, in Borrower a writing or writings satisfying the Prudent Lender Standard, all fee of $1,000.00 as consideration of Successor Borrower’s assumption of Borrower’s obligations under the Full Defeased Note or the Defeased NoteLoan Documents. Notwithstanding any contrary provision hereunder, as the case may be, the other Loan Documents and the Security Agreement and, no Transfer fee is payable to Lender upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and Transfer of the Loan Documents as the obligation of Successor Borrower. in accordance with this Section.
(i) Borrower shall pay all out-of-pocket reasonable costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred Lender in connection with Successor the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include, without limitation, all fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including, without limitation, reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described herein and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance); reasonable Attorneys’ Fees and Costs; and a processing fee to cover Lender’s administrative costs to process Borrower’s assumption of Defeasance request. Lender reserves the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release right to require that Borrower from any liability or obligation relating post a deposit to any environmental matters arising under Section 5.1(F)cover costs which Lender reasonably anticipates will be incurred.
Appears in 2 contracts
Samples: Multifamily Mortgage, Assignment of Rents and Security Agreement (Behringer Harvard Opportunity REIT II, Inc.), Multifamily Mortgage, Assignment of Rents and Security Agreement (Paladin Realty Income Properties Inc)
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Lender receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”) for Lender’s processing of the Defeasance. If Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including does not receive the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial DefeasanceFee, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the right to obtain Defeasance Deposit pursuant to purchase the that Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section 11.12, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)11.
Appears in 2 contracts
Samples: Multifamily Loan and Security Agreement (New Senior Investment Group Inc.), Multifamily Loan and Security Agreement
Defeasance. Borrower (A) If the Trust shall not pay or cause to be permitted paid, or there shall otherwise be paid, to the Registered Owners of any Series of Bonds then Outstanding, the principal amount and interest and Redemption Price, if any, to become due thereon, at any time to defease all or any portion of the Loan except as expressly provided times and in the manner stipulated therein and in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurTrust Agreement, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance if no Reimbursement Obligations or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums Qualified Hedge Payments then due and payable under remain unpaid relating to such Series of Bonds or payment of such Reimbursement Obligations or Qualified Hedge Payments have been provided for, then the Loan Documents,
(e) Borrower pledge of any Revenues or other moneys and securities pledged by this Trust Agreement and all other rights granted by this Trust Agreement securing such Series of Bonds shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateralbe discharged and satisfied. In connection with such event, the foregoingMaster Trustee shall, Borrower appoints Lender as Borrower’s agent for upon request of the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall Trust, execute and deliver to Lender the Trust all documents reasonably such instruments as may be desirable to evidence such release and discharge and shall pay over or deliver to the Trust all moneys or securities held by it pursuant to this Trust Agreement which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption or for the payment of Reimbursement Obligations or Qualified Hedge Payments.
(B) Bonds or portion thereof or interest installments for the payment or redemption of which moneys shall be held by Lender a Fiduciary (through deposit by the Trust of funds for such payment or redemption or otherwise), whether at or prior to the maturity or the redemption date of such Bonds, shall be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section 11.
1. All Outstanding Bonds of any Series or any part of a Series shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section 11.1 if (i) in the case any of a Full Defeasancesaid Bonds are to be redeemed on any date prior to their maturity, to amend and restate the Note in a principal amount equal an Authorized Officer shall have given to the then outstanding principal balance Master Trustee, in form satisfactory to it, irrevocable instructions to provide, as provided in Article IV, notice of the Loan (the “Full Defeased Note”)redemption on said date of such Bonds, and (ii) there shall have been deposited with a Fiduciary either (x) moneys in an amount which shall be sufficient or (y) Defeasance Obligations (a) not subject to redemption at the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% option of the Allocated Loan Amount issuer thereof prior to the due date thereof or (b) as to which an irrevocable notice of redemption of such securities on a specified redemption date has been given and such securities are not otherwise subject to redemption prior to such specified date other than at the option of the Individual Property to be defeased owner thereof or (C) upon compliance with the “Defeased Note”); and provisions of paragraph (BE) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
11.1 which are subject to redemption prior to maturity at the option of the issuer thereof on a specified date or dates, in each case the principal of and interest on which when due will provide moneys which, together with the moneys, if any, deposited with a Fiduciary at the time of deposit of such Defeasance Obligations, shall be sufficient (h) In without reference to any forward purchase agreement as hereinafter provided), as certified by a firm of independent public accountants or a certified public accountant, to pay when due the case of a Partial Defeasanceprincipal amount or Redemption Price, the Debt Service Coverage Ratio with respect if applicable, and interest due and to become due on said Bonds on and prior to the Undefeased Note shall be equal to redemption date or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Notematurity date thereof, as the case may be, and in the event said Bonds do not mature and are not by their terms subject to redemption within the next succeeding 60 days, an Authorized Officer shall have given the Master Trustee in form satisfactory to it irrevocable instructions to provide, as soon as practicable, written notice to the Registered Owners of such Bonds that the deposit required by clause (ii) above has been made with a Fiduciary and that said Bonds are deemed to have been paid in accordance with paragraph (A) of this Section 11.1 and stating the maturity or redemption date upon which moneys are to be available for the payment of the principal amount or Redemption Price, if applicable, on said Bonds. Neither Defeasance Obligations nor moneys deposited with a Fiduciary pursuant to this Section nor principal or interest payments on any such Defeasance Obligations shall be withdrawn or used for any purpose other Loan Documents than, and all of the Security same shall be held in trust for, the payment of the principal amount or Redemption Price, if applicable, and interest on said Bonds, provided, however that any cash received from the principal or interest payments on such Defeasance Obligations deposited with a Fiduciary, if not then needed for such purpose, may, to the extent practicable be reinvested in Defeasance Obligations as directed by an Authorized Officer or, in lieu of such direction at the time of receipt, an Authorized Officer may authorize and direct such Fiduciary to enter into one or more forward purchase agreements providing for the purchase of Defeasance Obligations at future dates, provided, further, that if such amounts shall have been derived from the proceeds of any Tax Exempt Bonds or bonds not issued hereunder which shall have been issued on the basis that the interest thereon is not includable in the gross income of the Registered Owner thereof for federal income tax purposes, any such amounts may be reinvested, or any such forward purchase agreement may be executed only upon receipt by the Master Trustee of a Bond Counsel’s opinion that such reinvestment or forward purchase agreement shall not adversely affect the exclusion of the interest on such Tax Exempt Bonds or other bonds from gross income for federal income tax purposes. In the event of any conflict between the terms of such forward purchase agreement and this Trust Agreement, together with the pledged provisions of this Trust Agreement shall apply. After the making of the payments for which such Defeasance Collateral. The Successor Obligor Obligations or moneys were held, any surplus shall assumebe promptly paid over to the Trust, in a writing as received by such Fiduciary, free and clear of any trust, lien or writings satisfying pledge or assignment securing the Prudent Lender Standard, all Bonds or otherwise existing under this Trust Agreement.
(C) For purposes of Borrower’s obligations under determining whether Variable Rate Bonds shall be deemed to have been paid prior to the Full Defeased Note maturity or the Defeased Noteredemption date thereof, as the case may be, by the other Loan Documents deposit of moneys, or Defeasance Obligations and moneys, if any, in accordance with paragraph (B)(ii) hereof, the interest to come due on such Variable Rate Bonds on or prior to the maturity date or redemption date thereof, as the case may be, shall be calculated at the maximum rate of interest applicable to such Bonds if in effect with respect to such Bonds, provided that if on any date, as a result of such Variable Rate Bonds having borne interest at less than such maximum rate of interest for any period, the total amount of moneys and Defeasance Obligations on deposit with the Fiduciary for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited with the Fiduciary on such date in respect of such Variable Rate Bonds in order to satisfy the provisions of paragraph (B)(ii) above, the Fiduciary shall, if requested by the Trust, pay promptly the amount of such excess to the Trust free and clear of any trust, lien, pledge or alignment securing the Bonds or otherwise existing under this Trust Agreement.
(D) Tender Bonds shall be deemed to have been paid in accordance with paragraph (B)(ii) hereof only if, in addition to satisfying the requirements thereof, there shall have been deposited with a Fiduciary moneys in an amount which shall be sufficient to pay when due the maximum amount of principal of and premium, if any, and interest on such Bonds which could become payable to the Registered Owners of such Bonds upon the exercise of any options provided to the Registered Owners of such Bonds, provided that if, at the time a deposit is made with a Fiduciary pursuant to the provisions of paragraph (B)(ii) above, the options originally exercisable by the Registered Owner of Tender Bonds are no longer exercisable, such Bonds shall not be considered Tender Bonds for purposes of this paragraph (D). If any portion of the moneys deposited with a Fiduciary for the payment of the principal amount of and premium, if any, and interest on Tender Bonds is not required for such purpose, the Fiduciary shall, if requested by the Trust, pay promptly the amount of such excess to the Trust free and clear of any trust, lien, pledge or assignment securing said Bonds or otherwise existing under this Trust Agreement.
(E) Defeasance Obligations described in paragraph (B)(ii) above may be included in the Defeasance Obligations deposited with a Fiduciary in order to satisfy the requirements of paragraph (B)(ii) above only if the determination as to whether moneys and Defeasance Obligations to be deposited with a Fiduciary in order to satisfy the requirements of such paragraph (B)(ii) above would be sufficient to pay when due either on the maturity date thereof or, in the case of any Bonds to be redeemed prior to the maturity date thereof, on the redemption date or dates specified in any notice of redemption to be made by the Master Trustee or in the instructions to give a notice of redemption provided to the Master Trustee in accordance with paragraph (B)(ii) above, the principal of or Redemption Price, if applicable, and interest on the Bonds which will be deemed to have been paid as provided in paragraph (B)(ii) above is made both (i) on the assumption that the Defeasance Obligations described in paragraph (B)(ii) above were not redeemed at the option of the issuer prior to the maturity date thereof and (ii) on the assumption that such Defeasance Obligations would be redeemed by the issuer thereof at its option on each date on which such option could be exercised, that as of such date or dates interest ceased to accrue on such Defeasance Obligations and that the proceeds of such redemption would not be reinvested by the Fiduciary.
(F) Anything in this Trust Agreement to the contrary notwithstanding (but subject to applicable escheat law) any moneys held by a Fiduciary in trust for the payment and discharge of any Bonds which remain unclaimed for three years after the date when such Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Fiduciary at such date, or for six months less than the applicable statutory escheat period (as determined by an Authorized Officer) if such moneys were deposited with the Fiduciary after the date when such Bonds become due and payable, shall, upon written direction from the Trust, be paid to the Trust as its absolute property and free from trust, and such Fiduciary shall thereupon be released and discharged with respect thereto and the Security Agreement andOwners shall look only to the Trust for the payment of such Bonds, upon provided that before being required to make any such assignmentpayment to the Trust, Borrower such Fiduciary shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm at the valid creation and authority expense of the Successor Borrower (including Trust, cause to be published at least twice, at an interval of not less than seven days between publications, in Authorized Newspapers, a non-consolidation opinion)notice that said moneys remain unclaimed it and that, after a date named in said notice, which date shall not be less than 30 days after the date of the first publication of such notice, the assignment and assumption balance of such moneys then unclaimed will be returned promptly to the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Trust.
Appears in 2 contracts
Samples: Master Trust Agreement, Master Trust Agreement
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 44 shall apply in the event the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 44(a) and (c) below, Borrower shall have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the lien of this Instrument upon the satisfaction of the following conditions:
(a) Borrower shall not be permitted have the right to obtain Defeasance at any time to defease all or any portion of the following times:
(i) if the Loan is not assigned to a REMIC trust;
(ii) during the Lockout Period (as defined in the Note);
(iii) after the expiration of the Defeasance Period (as defined in the Note); or
(iv) after Xxxxxx has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 6 of the Note.
(b) Borrower shall give Lender Notice (the “Defeasance Notice”) specifying a Business Day (the “Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Xxxxxx will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.
(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (the “Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate.
(i) If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations hereunder, Xxxxxx shall have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as expressly provided in Section 44(d)(ii), Borrower shall be released from all further obligations under this Section 2.1044. Provided Borrower acknowledges that no Xxxxxx will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the lien of this Instrument in reliance on the executed Defeasance Notice. Xxxxxxxx agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Instrument, of the damages Lender will incur by reason of Xxxxxxxx’s default.
(ii) In the event that the Defeasance is not consummated on the Defeasance Closing Date for any reason, Xxxxxxxx agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 44(d)(i) above) incurred by Xxxxxx in reliance on the executed Defeasance Notice, within 5 Business Days after Xxxxxxxx receives a written demand for payment, accompanied by a statement, in reasonable detail, of Xxxxxx’s third party costs and expenses.
(iii) All payments required to be made by Borrower to Lender pursuant to this Section 44 shall be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.
(e) No Event of Default has occurred and is continuing.
(f) The documents required to be delivered to Lender on or prior to the Defeasance Closing Date are:
(i) an opinion of counsel for Xxxxxxxx, after in form and substance satisfactory to Lender, to the date which effect that Lender has a valid and perfected lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof;
(ii) an opinion of counsel for Xxxxxxxx, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is two duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms;
(iii) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms;
(iv) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created;
(v) if Borrower designates the Successor Borrower, an opinion of counsel for Successor Xxxxxxxx, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court;
(vi) unless waived by Xxxxxx, an opinion of counsel for Xxxxxxxx, in form and substance satisfactory to Lender, to the effect that:
(A) if, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) years after the Start-Up Day qualification and status of the last Note securitized, Borrower may voluntarily defease all REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Loan Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance, and
(B) the Defeasance will not result in a “Full Defeasancesale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder;
(vii) if any certificates evidencing the Securitization remain outstanding, a Rating Confirmation;
(viii) unless waived by Xxxxxx, a written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date;
(ix) Lender’s form of a pledge and security agreement (“Pledge Agreement”) or and financing statements which pledge and create a portion first priority security interest in the Defeasance Collateral in favor of the Loan Xxxxxx;
(x) Lender’s form of a transfer and assumption agreement (“Partial DefeasanceTransfer and Assumption Agreement”), whereupon Borrower and any guarantor (in either each case, subject to the satisfaction of the following conditions precedent:
(aall requirements hereunder) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred relieved from liability in connection with the delivery Loan (other than any liability under Section 18 of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal this Instrument for events that occur prior to the Defeasance DepositClosing Date, or, at Lender’s request, deliver to Lender whether discovered before or after the Defeasance Collateral. In connection with the foregoing, Closing Date) and Successor Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,shall assume all remaining obligations;
(fxi) Borrower shall execute and deliver to Lender Forms of all documents reasonably required necessary to release the Mortgaged Property from the liens created by Lender this Instrument and related UCC financing statements (i) in the case of a Full Defeasancecollectively, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased NoteRelease Instruments”), and each in appropriate form required by the state in which the Property is located; and
(iixii) in the case of a Partial Defeasancesuch other opinions, to issue two substitute notes certificates, documents or instruments as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note Lender may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,reasonably request;
(g) Borrower shall deliver to Lender on or prior to the following itemsDefeasance Closing Date:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the The Defeasance Collateral (the “Security Agreement”),which meets all requirements of Section 44(g)(ii) below and is owned by Xxxxxxxx, free and clear of all liens and claims of third-parties;
(ii) The Defeasance Collateral must be in an amount to provide for execution by Lender(A) redemption payments to occur prior, a release but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date and (B) deliver redemption proceeds at least equal to the amount of principal and interest due on the Note on each applicable Individual Property being defeased Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”). The Defeasance Collateral shall be arranged such that redemption payments received from the lien Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments. Unless otherwise agreed in writing by Xxxxxx, the pledge of the Defeasance Collateral shall be effectuated through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,laws; and
(iii) an Officer’s Certificate of Borrower certifying that All accrued and unpaid interest and all other sums due under the requirements set forth in Note, this Section 2.10 have been satisfied Instrument and under the other Loan Documents, including, without limitation, that no Event of Default has occurred and is continuing,all amounts due under Section 44(i) below, up to the Defeasance Closing Date shall be paid in full on or prior to the Defeasance Closing Date.
(ivh) If Lender permits Borrower to designate the Successor Borrower, then Borrower shall, at Borrower’s expense, designate or establish an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, accommodation borrower (A“Successor Borrower”) that, the Defeasance Collateral has been duly and validly assigned and delivered satisfactory to Lender and Lender has (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a first priority perfected security interest in and Lien on “Single Purpose Entity” to assume at the time of Defeasance Deposit and a first priority perfected security interest in and Lien on ownership of the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan liability for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as Pledge Agreement and the case may be, the other Loan Documents and (to the Security Agreement, together with the pledged Defeasance Collateralextent that liability thereunder survives release of this Instrument). The Borrower shall pay to Successor Obligor shall assume, in Borrower a writing or writings satisfying the Prudent Lender Standard, all fee of $1,000.00 as consideration of Successor Xxxxxxxx’s assumption of Borrower’s obligations under the Full Defeased Note or the Defeased NoteLoan Documents. Notwithstanding any contrary provision hereunder, as the case may be, the other Loan Documents and the Security Agreement and, no Transfer fee is payable to Lender upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and Transfer of the Loan Documents as the obligation of Successor Borrower. in accordance with this Section.
(i) Borrower shall pay all out-of-pocket reasonable costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred Lender in connection with Successor the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include, without limitation, all fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including, without limitation, reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described herein and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance); the cost incurred by Lender to obtain a Rating Confirmation contemplated hereunder; reasonable Attorneys’ Fees and Costs; and a processing fee to cover Xxxxxx’s administrative costs to process Borrower’s assumption of Defeasance request. Lender reserves the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release right to require that Borrower from any liability or obligation relating post a deposit to any environmental matters arising under Section 5.1(F)cover costs which Lender reasonably anticipates will be incurred.
Appears in 2 contracts
Samples: Multifamily Deed of Trust, Assignment of Rents and Security Agreement (NTS Realty Holdings Lp), Multifamily Deed of Trust, Assignment of Rents and Security Agreement (Bluerock Enhanced Multifamily Trust, Inc.)
Defeasance. Borrower shall not be permitted at (a) At any time during the period commencing on (i) the first Business Day after the date that is the earlier of (A) two (2) years after the "startup day," within the meaning of Section 860G(a)(9) of the Code, of a "real estate mortgage investment conduit," within the meaning of Section 860D of the Code (a "REMIC"), that holds the Mortgage Note and (B) three (3) years after the Closing Date, and ending on (ii) the Anticipated Repayment Date (such period being sometimes referred to herein as the "DEFEASANCE PERIOD"), and provided no Event of Default has occurred and is continuing (other than an Event of Default that will be cured by the release of a Mortgaged Property or Mortgaged Properties from the Lien of the Security Documents pursuant to the provisions of SECTION 7.1.3 hereof), Borrower may voluntarily defease all or any portion of the Loan except as expressly provided in this Section 2.10by providing Lender with the Defeasance Deposit (hereinafter, a "DEFEASANCE EVENT"). Provided that no Each Defeasance Event of Default has occurred and is continuing, after by the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, shall be subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide not less than fifteen twenty (1520) days prior written notice to Lender specifying (i) a Payment Date regularly scheduled payment date (the “Defeasance Release Date”"DEFEASANCE DATE") on which the Full Defeasance or Partial Defeasance Event is to occur, and (ii) in . Such notice shall indicate the event principal amount of a Partial Defeasance, the Individual Property proposed Mortgage Note to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,;
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(dii) Borrower shall pay to Lender all reasonable out-of-pocket fees accrued and expenses associated with unpaid interest on the Full principal balance of the Mortgage Note to but not including the Defeasance or Partial DefeasanceDate. If for any reason the Defeasance Date is not a regularly scheduled payment date, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with Borrower shall also pay interest that would have accrued on the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under Mortgage Note through the Loan Documents,next regularly scheduled payment date;
(eiii) Borrower shall either deposit with pay to Lender an amount equal to all other sums, not including scheduled interest or principal payments, due under the Defeasance DepositMortgage Note, orthis Agreement, at Lender’s requestthe Mortgage, deliver and the other Loan Documents;
(iv) Borrower shall pay to Lender the required Defeasance Collateral. Deposit for the Defeasance Event;
(v) In connection with the foregoingevent only a portion of the Loan is the subject of the Defeasance Event, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender prepare all necessary documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) notes, one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount defeased portion of the Defeased original Note (the “Undefeased Note”"DEFEASED NOTE") and the other note having a principal balance equal to the undefeased portion of the Note (the "UNDEFEASED NOTE"). The Defeased Note and the Undefeased Note shall have identical terms identical to as the terms of the Note, Note except for the principal balance and a pro rata allocation of the Required Debt Service Paymentbalance. Neither a Full A Defeased Note nor a Defeased Note may cannot be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Defeasance Event;
(gvi) Borrower shall execute and deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standardsatisfactory to Lender, creating a first priority perfected Lien lien on the Defeasance Deposit and the U.S. Obligations purchased with the Defeasance Collateral Deposit in accordance with this provision of this SECTION 2.5 (the “Security Agreement”"DEFEASANCE SECURITY AGREEMENT"),;
(iivii) Borrower shall deliver an opinion of counsel for execution Borrower in form satisfactory to Lender in its sole discretion stating, among other things, that Borrower has legally and validly transferred and assigned the U.S. Obligations and all obligations, rights and duties under and to the Mortgage Note or Defeased Note (as applicable) to the Successor Borrower, that Lender has a perfected first priority security interest in the Defeasance Deposit and the U.S. Obligations delivered by LenderBorrower, that such Defeasance will not adversely affect the status of the entity holding the interest in the Mortgage Note as a release REMIC (assuming for such purpose that such entity otherwise qualifies as a REMIC) and that such Defeasance will not result in a deemed exchange of each applicable Individual Property being defeased the Certificates pursuant to Section 1001 of the Code;
(viii) Borrower shall deliver a Rating Comfort Letter from the lien of Rating Agencies in connection with the Defeasance Event. If required by the applicable Mortgage Rating Agencies, Borrower shall also deliver or cause to be delivered a Substantive Non-Consolidation Opinion with respect to the Successor Borrower in a form appropriate for and substance satisfactory to Lender and the jurisdiction in which such Individual Property is located,applicable Rating Agencies;
(iiiix) Borrower shall deliver an Officer’s 's Certificate of Borrower certifying that the requirements set forth in this Section 2.10 SECTION 2.5(a) have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivx) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered Borrower shall deliver to Lender and Lender has a first priority perfected security interest in and Lien on certificate of Borrower's independent certified public accountant certifying that the U.S. Obligations purchased with the Defeasance Deposit and a first priority perfected security interest in and Lien on will generate monthly amounts equal to or greater than the required Scheduled Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, andPayments;
(vxi) Borrower shall deliver such other certificates, documents or instruments as Lender may reasonably request including, without limitation, request; and
(Axii) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued Borrower shall pay all costs and expenses of Lender incurred in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies Event, including any costs and expenses associated with all a release of the requirements Lien of this Section 2.10,the Mortgage as provided in SECTION 2.8 hereof or SECTION 2.9 hereof, as applicable, as well as reasonable attorneys' fees and expenses.
(hb) In connection with each Defeasance Event, Borrower hereby appoints Lender as its agent and attorney-in-fact for the purpose of using the Defeasance Deposit to purchase U.S. Obligations which provide payments on or prior to, but as close as possible to, all successive Due Dates after the Defeasance Date upon which interest payments are required under the Mortgage Note, in the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan Defeasance Event for the trailing twelve (12) months immediately prior to such Partial Defeasanceentire outstanding principal balance of the Loan, and
(i) In or the Defeased Note, in the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all Defeasance Event for only a portion of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance outstanding principal balance of the Loan, Borrower shall assign as applicable, and in amounts equal to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations scheduled payments due on such Due Dates under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Mortgage Note or the Defeased Note, as applicable, and assuming such Mortgage Note or Defeased Note is paid in full on the case may beAnticipated Repayment Date (the "SCHEDULED DEFEASANCE PAYMENTS"). Borrower, pursuant to the other Loan Documents and the Defeasance Security Agreement andor other appropriate document, upon such assignment, Borrower shall, except as set forth herein, shall authorize and direct that the payments received from the U.S. Obligations may be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition made directly to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower Cash Collateral Account (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred unless otherwise directed by Lender) and applied to satisfy the obligations of Borrower under the Mortgage Note or the Defeased Note, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)as applicable.
Appears in 2 contracts
Samples: Loan Agreement (Arden Realty Inc), Loan Agreement (Arden Realty Inc)
Defeasance. Borrower shall not be permitted The Corporation may, at its option and at any time time, upon delivery to defease all or any portion the Trustee of a Certified Resolution authorizing such action, terminate the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two obligations (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction exceptions set forth below) of the following Corporation with respect to all outstanding Debt Securities and any coupons appertaining thereto and any Debt Securities Guarantee which may have been given in respect of any series of outstanding Debt Securities and the Corporation shall be deemed to have been discharged from its obligations with respect to the outstanding Debt Securities and any coupons appertaining thereto, and any such Debt Securities Guarantee shall terminate, on the date the conditions precedent:
set forth in Section 13.3 are satisfied (a) Any Full Defeasance or Partial Defeasance hereinafter "defeasance"). For this purpose, such defeasance means that the Corporation shall be deemed to have paid and discharged the entire indebtedness represented by all then outstanding Debt Securities and any coupons appertaining thereto, which shall thereafter be deemed to be "outstanding" only for the purposes of the Loan by Borrower provisions of this Indenture referred to in clauses (1) through (4) below, and to have satisfied all of its other obligations under such Debt Securities and any coupons appertaining thereto and this Indenture insofar as such Debt Securities and any coupons appertaining thereto are concerned and also means that any such Debt Securities Guarantee which may have been given in respect of the outstanding Debt Securities shall be made on a Payment Date,
terminated (b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (and the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, orTrustee, at Lender’s requestthe expense of the Corporation, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in proper instruments acknowledging the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”same), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance following which shall survive until otherwise terminated or discharged hereunder: (1) the rights of holders of such outstanding Debt Securities and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasancecoupons appertaining thereto to receive, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased solely from the lien of the applicable Mortgage trust fund described in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements Section 13.3 and as more fully set forth in such Section and Section 13.4, payments in respect of the principal of (and premium, if any) and interest, if any, on, and Additional Amounts, if any, payable with respect to, such Debt Securities and any coupons appertaining thereto when such payments are due, (2) the obligation of the Corporation to pay Additional Amounts in respect of the Debt Securities pursuant to Section 8.1, (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder, and (4) the provisions of Sections 1.5, 1.6, 2.7, 2.8, 2.14, 5.1(i), 7.4, 7.5, 8.3 and 11.4 and of this Article 13. Subject to compliance with this Article 13, the Corporation may exercise its option under this Section 2.10 have been satisfied including, without limitation, that no Event 13.1 notwithstanding the prior exercise of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this its option under Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio 13.2 with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, such Debt Securities and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)coupons appertaining thereto.
Appears in 2 contracts
Samples: Trust Indenture (Cnooc LTD), Trust Indenture (Nexen Inc)
Defeasance. Borrower shall not be permitted 18.2.1 The Issuer may, at its option and at any time time, elect to defease all or any portion have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Covenant Defeasance”);
(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Loan except Bondholders cash or government obligations accepted by the Bond Trustee (the “Defeasance Pledge”) in such amounts as expressly provided will be sufficient for the payment of principal (including premium payable upon exercise of a Put Option) and interest on the Outstanding Bonds to Maturity Date (or redemption upon a exercise of a notified Put Option);
(b) the Issuer shall, if required by the Bond Trustee, provide a legal opinion reasonable acceptable to the Bond Trustee to the effect that the Bondholders will not recognize income, gain or loss for income tax purposes (hereunder US federal or Norwegian, if applicable) as a result of the Defeasance Pledge and Covenant Defeasance, and will be subject to such income tax on the same amount and in this Section 2.10. Provided that the same manner and at the same times as would have been the case if the Defeasance Pledge had not occurred;
(c) no Event of Default has shall have occurred and is continuingbe continuing on the date of establishment of the Defeasance Pledge, or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 181st day after the date of establishment of the pledge;
(d) neither the Defeasance Pledge nor the Covenant Defeasance results in a breach or violation of any material agreement or instrument binding upon the Issuer, or the articles of association or other corporate documents governing the Issuer;
(e) the Issuer shall have delivered to the Bond Trustee a certificate signed by its Chief Executive Officer that the Defeasance Pledge was not made by the Issuer with the intent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others;
(f) the Issuer shall have delivered to the Bond Trustee any certificate or legal opinion reasonably required regarding the Covenant Defeasance or Defeasance Pledge (including certificate from its Chief Executive Officer and a legal opinion from its legal counsel) to the effect that all conditions for Covenant Defeasance have been complied with; and that the Defeasance Pledge (i) will not be subject to any rights of creditors of the Issuer, (ii) will constitutes a valid, perfected and enforceable security interest in favour of the Bond Trustee for the benefit of the Bondholders, and (iii) will, after the date which is two (2) years after 181st day following the Start-Up Day of establishment, the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, funds and assets so pledged will not be subject to the satisfaction effects of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally under the laws of the following conditions precedent:jurisdiction where the Defeasance Pledge was established and the corporate domicile of the Issuer.
18.2.2 Upon the exercise by the Issuer of its option under Clause 18.2.1;
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower Issuer shall be made on a Payment Date,released from their obligations under all provisions in Clause 13, except 13.2.1 (a), (e), (h) and (i).
(b) Borrower the Issuer shall provide not less than fifteen (15and shall ensure that all Group Companies shall not) days prior written notice take any actions that may cause the value of the security interest created by this Covenant Defeasance to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurbe reduced, and (ii) in shall at the event request of a Partial Defeasancethe Bond Trustee execute, the Individual Property proposed or cause to be defeased; providedexecuted, thatsuch further documentation and perform such other acts as the Bond Trustee may reasonably require in order for such security interests to remain valid, Borrower shall be required to defease enforceable and perfected by the Loan on Bond Trustee for the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to account of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Bondholders;
(c) Borrower save as provided for in (a) above, all provisions of the Bond Agreement shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including remain fully in force without any modifications.
18.2.3 All moneys amount covered by the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” Pledge shall be deemed to mean applied by the Undefeased NoteBond Trustee, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements provisions of this Section 2.10Bond Agreement, to the Individual Property which is payment to the subject Bondholders of such Full Defeasance or Partial Defeasance all sums due to them under this Bond Agreement on the due date thereof. Any excess funds not required for the payment of principal, premium and interest to the Bondholders (including any expenses, fees etc. due to the Bond Trustee hereunder) shall be released from returned to the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Issuer.
Appears in 2 contracts
Samples: Bond Agreement, Bond Agreement (Pacific Drilling S.A.)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Release Date to voluntarily defease the Start-Up Day entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Mortgage by providing Lender with the Defeasance Collateral (hereinafter, a “Full Defeasance”"Defeasance Event") or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the upon satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen thirty (1530) days prior written notice to (or such shorter period of time permitted by Lender in its sole discretion) specifying (i) a Payment Date date (the “"Defeasance Release Date”") on which the Full Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender (A) all reasonable out-of-pocket fees payments of principal and expenses associated with interest due on the Full Loan to and including the Defeasance or Partial Defeasance, as applicable Date and (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if anyB) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Note, this Agreement, the Mortgage and the other Loan Documents,;
(eiii) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender Collateral into the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Sections 2.5.2 and 2.5.3 hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Defeasance Collateral;
(gv) Borrower shall deliver to Lender the following items:
opinions of counsel for Borrower that are standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (iA) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on security interest in the Defeasance Deposit Collateral Account and the Defeasance Collateral, (B) if a Securitization has occurred, the REMIC Trust formed pursuant to such Securitization will not fail to maintain its status as a "real estate mortgage investment conduit" within the meaning of Section 860D of the Code as a result of a Defeasance Event pursuant to this Section 2.5.1, (C) the Defeasance Event will not result in a deemed exchange for purposes of the Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes, (D) delivery of the Defeasance Collateral and the grant of a security interest therein to Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law and (E) a non-consolidation opinion with respect to the “Security Agreement”),Successor Borrower;
(iivi) for execution by Lender, Borrower shall deliver to Lender a release of each applicable Individual Property being defeased from Rating Agency Confirmation as to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,Defeasance Event;
(iiivii) Borrower shall deliver an Officer’s 's Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.5.1
(a) have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivviii) an opinion Borrower shall deliver a certificate of counsel in form and substance satisfying the Prudent Lender Standard stating, among a "big five" or other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered nationally recognized public accounting firm acceptable to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(iix) 1.51:1.00Borrower shall deliver such other certificates, opinions, documents and (ii) instruments as the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, Rating Agencies may require; and
(ix) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all reasonable out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, of Lender incurred in connection with Successor Borrower’s assumption the Defeasance Event, including Lender's reasonable out-of-pocket attorneys' fees and expenses and Rating Agency fees and expenses.
(b) If Borrower has elected to defease the Note and the requirements of this Section 2.5.1 have been satisfied, the Property shall be released from the Lien of the Loan, Mortgage and the Defeasance Collateral pledged pursuant to the Security Agreement and shall be the sole source of collateral securing the Note. In connection with the release of the Lien of the Mortgage, Borrower shall submit to Lender, not less than thirty (30) days prior to the Defeasance CollateralDate (or such shorter time as is acceptable to Lender in its sole discretion), an assignment or release of Lien (and related Loan Documents) for execution by Lender. Nothing Such release shall be in a form appropriate in New York, New York and that contains standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer's Certificate certifying that such documentation (i) is in compliance with all Legal Requirements, and (ii) will effect such release in accordance with the terms of this Agreement. Borrower shall pay all costs, taxes and expenses associated with the release of the Lien of the Mortgage, including Lender's reasonable out-of-pocket attorneys' fees. Except as set forth in Section 2.4 and this Section 2.10 2.5, no repayment, prepayment or defeasance of all or any portion of the Note shall cause, give rise to a right to require, or otherwise result in, the release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)of the lien of the Mortgage on the Property.
Appears in 2 contracts
Samples: Loan Agreement (Reckson Associates Realty Corp), Loan Agreement (Reckson Operating Partnership Lp)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full This Section 11.13 will apply only if (i) Section 1.07 of this Loan Agreement provides for Defeasance or Partial Defeasance of and (ii) the Loan by Borrower shall be made on Note is assigned to a Payment REMIC trust prior to the Cut-off Date,.
(b) If the conditions specified in Section 11.13(a) are met, then subject to Sections 11.13(b)(i) and 11.13(b)(iii), Borrower shall provide not less than fifteen will have the right to defease the Loan in whole (15“Defeasance”) days prior written notice to Lender specifying and obtain the release of the Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions:
(i) Borrower will not have the right to obtain Defeasance at any of the following times:
(A) If the Loan is not assigned to a Payment Date REMIC trust.
(B) During the Lockout Period.
(C) After the expiration of the Defeasance Period.
(D) After Xxxxxx has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Note Section 5(f).
(ii) Borrower will give Lender Notice (“Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Xxxxxx receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving Notice. Xxxxxx will acknowledge receipt of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Notice and will notify Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan identity of the accommodation borrower (the “Full Defeased NoteSuccessor Borrower”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,.
(iii) an OfficerThe Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”) for Lender’s Certificate processing of Borrower certifying the Defeasance. If Lender does not timely receive the Defeasance Fee, then Xxxxxxxx’s right to obtain Defeasance pursuant to that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,Defeasance Notice will terminate.
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, If Borrower timely pays the Defeasance Collateral has been duly and validly assigned and delivered Fee, but Borrower fails to perform its other obligations under this Section 11.13, Lender and Lender has a first priority perfected security interest in and Lien on will have the right to retain the Defeasance Deposit and a first priority perfected security interest Fee as liquidated damages for Borrower’s default and, except as provided in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance Section 11.13(b)(iii)(B), Borrower will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).Section
Appears in 2 contracts
Samples: Multifamily Loan and Security Agreement, Multifamily Loan and Security Agreement
Defeasance. Borrower shall not be permitted Notwithstanding any provision of this Mortgage to the contrary, at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which (A) is two (2) years after the Start-Up Day “startup day,” within the meaning of Section 860G(a)(9) of the last Note securitizedInternal Revenue Code of 1986, Borrower may voluntarily defease all of as amended from time to time or any successor statute (the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceCode”), in either caseof a “real estate mortgage investment conduit,” (“REMIC”) within the meaning of Section 860D of the Code, subject to that holds the Note and this Mortgage or (B) four (4) years after the date hereof, whichever shall earlier occur, and provided no Event of Default has occurred, Mortgagor may cause the release of the Mortgaged Property from the lien of this Mortgage and the other Loan Documents upon the satisfaction of the following conditions precedentconditions:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide A. not less than fifteen sixty (1560) days prior written notice shall be given to Lender Mortgagee specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance Collateral is to occur, be delivered;
B. all accrued and (ii) in the event of a Partial Defeasanceunpaid interest and all other sums due under this Mortgage, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease Note and under the other Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior Documents up to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable Date, including, without limitation, all costs and expenses incurred by Lender Mortgagee or its agents in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable release (including, without limitation, fees the review of Rating Agencies the proposed Defeasance Collateral and accountants, the preparation of the Defeasance Security Agreement (as hereinafter defined) and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicabledocumentation), reasonable fees and out-of-pocket costs of any loan servicer (if any) shall be paid in connection with the Full Defeasance full on or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal prior to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,Release Date; and
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower C. Mortgagor shall deliver to Lender Mortgagee on or prior to the following itemsRelease Date:
(i1) a pledge and security agreement, in form and substance satisfying the Prudent Lender Standardsatisfactory to Mortgagee in its sole discretion, creating a first priority perfected Lien on the Defeasance Deposit and security interest in favor of Mortgagee in the Defeasance Collateral (the “Defeasance Security Agreement”),, which shall provide, among other things, that any payments generated by the Defeasance Collateral shall be paid directly to Mortgagee and applied by Mortgagee in satisfaction of all amounts then due and payable hereunder and any excess received by Mortgagee from the Defeasance Collateral over the amounts payable by Mortgagor hereunder or under the Note shall be refunded to Mortgagor promptly after each Payment Date;
(ii2) for execution by Lenderdirect, a release of each applicable Individual Property being defeased from the lien non-callable obligations of the United States of America that provide for payments prior, but as close as possible, to all successive Payment Dates occurring after the Release Date, with each such payment being equal to or greater than the amount of the corresponding installment of principal and interest required to be paid under the Note (provided that for all purposes of this Section 12.5(C)(2), all principal, accrued interest and other amounts payable under this Mortgage, the Note and the other Loan Documents shall be due and payable in full on the Maturity Date) (the “Defeasance Collateral”), each of which shall be duly endorsed by the holder thereof as directed by Mortgagee or accompanied by a written instrument of transfer in form and substance satisfactory to Mortgagee in its sole discretion (including, without limitation, such instruments as may be required by the depository institution holding such securities or the issuer thereof, as the case may be, to effectuate book-entry transfers and pledges through the book-entry facilities of such institution) in order to perfect upon the delivery of the Defeasance Security Agreement the first priority security interest in the Defeasance Collateral in favor of Mortgagee in conformity with all applicable Mortgage in a form appropriate for the jurisdiction in which state and federal laws governing granting of such Individual Property is located,security interests;
(iii3) an Officer’s Certificate a certificate of Borrower Mortgagor certifying that all of the requirements set forth in this Section 2.10 12.5 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(iv4) an opinion of counsel for Mortgagor in form and substance satisfying the Prudent Lender Standard and delivered by counsel satisfactory to Mortgagee in its sole discretion stating, among other things, that (Ax) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender Mortgagee has a perfected first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and that the Proceeds thereof Defeasance Security Agreement is enforceable against Mortgagor in accordance with its terms and (By) that the subject Partial Defeasance any trust formed as a REMIC pursuant to a securitization will not adversely affect fail to maintain its status as a REMIC as a result of such defeasance;
(5) in the status of event the Loan is held by a REMIC, the Mortgagee has received written confirmation from any REMIC formed Rating Agency rating any securities issued in connection with a Secondary Market Transactionsecuritization that substitution of the Defeasance Collateral will not result in a downgrade, withdrawal, or qualification of the ratings then assigned to any of the securities;
(6) a certificate of a public accounting firm reasonably acceptable to Mortgagee certifying that the Defeasance Collateral will generate monthly amounts equal to or greater than the amount of each corresponding installment of principal and interest required to be paid under the Note for all successive Payment Dates occurring after the Release Date;
(7) a letter or other written evidence from any applicable Rating Agency that the defeasance will not result in the withdrawal, downgrade or qualification of the ratings assigned to any certificates issued in connection with a securitization of the Mortgaged Property, if applicable; and
(v) 8) such other certificates, documents or instruments as Lender Mortgagee may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standardrequire. Upon compliance with the requirements of this Section 2.1012.5, the Individual Mortgaged Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of this Mortgage and the applicable Mortgageother Loan Documents, and the Defeasance Collateral shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity constitute collateral which shall be a Special-Purpose Entity (secure the “Successor Obligor”), Note and all of Borrower’s other obligations under the Full Defeased Note or Defeased Loan Documents. Mortgagee will, at Mortgagor’s expense, execute and deliver any agreements reasonably requested by Mortgagor to release the lien of the Mortgaged Instrument from the Mortgaged Property. Upon the release of the Mortgaged Property in accordance with this Section 12.5, Mortgagor may assign all its obligations and rights under the Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral, to a successor entity designated by Mortgagor and approved by Mortgagee in its sole discretion. The Successor Obligor Such successor entity shall assume, execute an assumption agreement in a writing or writings satisfying the Prudent Lender Standard, all of Borrowerform and substance satisfactory to Mortgagee in its sole discretion pursuant to which it shall assume Mortgagor’s obligations under the Full Defeased Note or and the Defeased Defeasance Security Agreement. As conditions to such assignment and assumption, Mortgagor shall (x) deliver to Mortgagee an opinion of counsel in form and substance and delivered by counsel satisfactory to Mortgagee in its sole discretion stating, among other things, that such assumption agreement is enforceable against Mortgagor and such successor entity in accordance with its terms and that the Note, as the case may be, Defeasance Security Agreement and the other Loan Documents Documents, as so assumed, are enforceable against such successor entity in accordance with their respective terms, (y) pay all costs and expenses incurred by Mortgagee or its agents in connection with such assignment and assumption (including, without limitation, the review of the proposed transferee and the Security Agreement andpreparation of the assumption agreement and related documentation) and (z) deliver to Mortgagee a non-consolidation opinion in form and substance satisfactory to Mortgagee and the applicable Rating Agency. Upon such assumption, upon such assignment, Borrower shall, except as set forth herein, Mortgagor shall be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm under the valid creation other Loan Documents and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and under the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Agreement.
Appears in 2 contracts
Samples: Mortgage Consolidation and Modification Agreement (American Realty Capital New York Recovery Reit Inc), Mortgage and Security Agreement (American Realty Capital New York Recovery Reit Inc)
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Xxxxxx has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Xxxxxx receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Xxxxxx will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”) for Lender’s processing of the Defeasance. If Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including does not receive the Defeasance Release Date,
(d) Borrower shall pay Fee, then Xxxxxxxx’s right to Lender all reasonable out-of-pocket fees and expenses associated with the Full obtain Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related pursuant to such Full that Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section 11.12, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)11.
Appears in 2 contracts
Samples: Multifamily Loan and Security Agreement (Resource Apartment REIT III, Inc.), Multifamily Loan and Security Agreement
Defeasance. Borrower shall not be permitted at (a) At any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) three years after from the Start-Up Day date hereof and provided no Event of Default exists, Mortgagor may obtain the release of the last Note securitized, Borrower may voluntarily defease all Mortgaged Property from the lien of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to this Mortgage upon the satisfaction of the following conditions precedent:
(ai) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen thirty (1530) days prior written notice to Lender Mortgagee specifying (i) a Payment Date regularly scheduled payment date (the “Defeasance "Release Date”") on which the Full Defeasance or Partial Defeasance Deposit (hereinafter defined) is to occur, and be made;
(ii) in the event payment to Mortgagee of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness principal balance of the Note to and including the Defeasance Release Date,;
(diii) Borrower shall pay the payment to Lender Mortgagee of all reasonable out-of-pocket fees and expenses associated with other sums, not including scheduled interest or principal payments, due under the Full Defeasance or Partial DefeasanceNote, as applicable (includingthis Mortgage, without limitation, fees the Assignment of Rating Agencies and accountantsLeases, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,;
(eiv) Borrower shall either deposit with Lender an amount equal the payment to Mortgagee of the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,: and
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (Bv) the other promissory note having a principal balance equal delivery to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following itemsMortgagee of:
(ia) a security agreement, in form and substance satisfying the Prudent Lender Standardsatisfactory to Mortgagee, creating a first priority perfected Lien lien on the Defeasance Deposit and the U.S. Obligations (hereinafter defined) purchased on behalf of Mortgagor with the Defeasance Collateral Deposit in accordance with this provision of this paragraph (the “"Security Agreement”"),;
(iib) for execution by Lender, a release of each applicable Individual the Mortgaged Property being defeased from the lien of the applicable this Mortgage (for execution by Mortgagee) in a form appropriate for the jurisdiction in which such Individual the Mortgaged Property is located,;
(iiic) an Officer’s Certificate officer's certificate of Borrower Mortgagor certifying that the requirements set forth in this Section 2.10 subparagraph (a) have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivd) an opinion of counsel for Mortgagor in form and substance satisfying the Prudent Lender Standard satisfactory to Mortgagee stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender that Mortgagee has a perfected first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest the U.S. Obligations purchased by Mortgagee on behalf of Mortgagor;
(e) evidence in and Lien on writing from the Defeasance Collateral and applicable Rating Agencies to the Proceeds thereof and (B) effect that the subject Partial Defeasance such release will not adversely affect the status result in a requalification, reduction or withdrawal of any REMIC formed rating in effect immediately prior to such defeasance for any securities issued in connection with a Secondary Market Transaction, ; and
(vf) such other certificates, documents or instruments as Lender Mortgagee may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth hereinrequest. In connection with a defeasance the conditions set forth in subparagraph (a)(v) above, Mortgagor hereby appoints Mortgagee as its agent and attorney-in-fact for the purpose of using the LoanDefeasance Deposit to purchase U.S. Obligations which provide payments on or prior to, Borrower shall assign but as close as possible to, all successive scheduled payment dates after the Release Date upon which interest and principal payments are required under the Note (including the amounts due on the Maturity Date) and in amounts equal to an entity, which entity which shall be a Special-Purpose Entity the scheduled payments due on such dates under the Note (the “Successor Obligor”"Scheduled Defeasance Payment@'). Mortgagor, all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and pursuant to the Security Agreement andor other appropriate document, upon such assignment, Borrower shall, except as set forth herein, shall authorize and direct that the payments received from the U.S. Obligations may be relieved of its made directly to Mortgagee and applied to satisfy the obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), Mortgagor under the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Note.
Appears in 1 contract
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Ridgewood Properties Inc)
Defeasance. Borrower shall not be permitted at (a) At any time prior to defease the Payment Date that is six (6) months prior to the Anticipated Repayment Date of any outstanding Series (such Payment Date, the “Defeasance Payment Date”) , the Issuer may obtain the release from all or any portion covenants of this Indenture relating to ownership and operation of the Loan except as expressly provided Tower Sites by delivering United States government securities that provide for payments which replicate the required payments on all of the Notes then outstanding and the Indenture Trustee Fee and Workout Fees, if any, through the Defeasance Payment Date for each Series of Notes (including payment in this Section 2.10. Provided full of the principal of the Notes on the related Defeasance Payment Date); provided, that (i) no Event of Default has occurred and is continuing, after continuing and (ii) the Issuer shall pay or deliver on the date which is two of such defeasance (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Date”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Outstanding Class Principal Indebtedness Balance of each Class of Notes to and but not including the Defeasance Release Date (and if the Defeasance Date is not a Payment Date,
(d) Borrower shall pay , the interest that would have accrued to Lender all reasonable out-of-pocket fees and expenses associated with but not including the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicablenext Payment Date), reasonable fees and out-of-pocket costs of any loan servicer (if anyb) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance CollateralPayments. In connection with addition, the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuer shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has Indenture Trustee a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on U.S. government securities so delivered by the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitationIssuer, (A2) written confirmation from an Opinion of Counsel as to the relevant Rating Agencies that enforceability and perfection of such Partial Defeasance will not cause any Rating Agency to withdrawsecurity interest, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B3) a certificate from confirmation by an Independent certified public accountant certifying accounting firm that the U.S. government securities so delivered are sufficient to pay all interest due from time to time after the Defeasance Collateral complies with Date (or if the Defeasance Date is not a Payment Date, due after the next Payment Date) and all principal due upon maturity for each Class of Notes, and all Indenture Trustee Fee and Workout Fees, if any, and (4) a Rating Agency Confirmation. The Issuer, pursuant to the security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be made directly to the Indenture Trustee and applied to satisfy the obligations of the requirements of this Section 2.10,Issuer under the Notes and the other Transaction Documents.
(hb) In If the case of a Partial DefeasanceAsset Entities will continue to own any material assets other than the U.S. government securities delivered in connection with the defeasance, the Debt Service Coverage Ratio Issuer shall establish or designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee, with respect to the Undefeased Note shall be equal to or greater than which (i) 1.51:1.00, a substantive non-consolidation Opinion of Counsel reasonably satisfactory to the Indenture Trustee has been delivered to the Indenture Trustee and to transfer to that entity the pledged U.S. government securities and (ii) the Debt Service Coverage Ratio with respect an Opinion of Counsel reasonably satisfactory to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect Indenture Trustee has been delivered to the Individual Properties securing Indenture Trustee that the Undefeased Note Issuer will not be required to register as an investment company under the Investment Company Act. The new entity shall be equal to or greater than (i) RevPAR with respect to all assume the obligations of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations Issuer under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents Notes being defeased and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents security agreement and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, Obligors and the Guarantor shall be relieved of its their obligations hereunderin respect thereof under the Transaction Documents. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition The Issuer shall pay Ten Dollars ($10) to such defeasance, new entity as consideration for assuming such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)obligations.
Appears in 1 contract
Samples: Indenture (American Tower Corp /Ma/)
Defeasance. Borrower shall not be permitted at any time Prior to defease the Closing, the ARA Companies and the AII Companies shall, and, from and after the Closing, the Survivor Entities shall, cause the Property Owners to use all or any portion commercially reasonable and good faith efforts to cause the release of the Properties from the Lien of the Mortgages and the other Loan Documents (the “Defeasance”) in accordance with the terms of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuingDocuments, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of including taking the following conditions precedentactions:
(a) Any Full Defeasance or Partial Defeasance of as soon as practicable after the Loan by Borrower date hereof, the Property Owners shall deliver written notice to Mortgagee specifying a date, which shall be made on or after the Closing Date (the “Release Date”), on which the Defeasance Amount is to be delivered, such Release Date only to occur on a Payment Date,Date (as defined in the Notes);
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower (but after the Closing), the Property Owners shall immediately reimburse Lender for any reasonable pay all accrued and unpaid interest and all other sums due under the Notes and under the other Loan Documents up to the Release Date, including all costs and expenses incurred by Lender Mortgagee or its agents in connection with Borrower’s giving such release (including the fees and expenses incurred by attorneys and accountants in connection with the review of such notice the proposed Defeasance Collateral (as defined in the Mortgages) and revocation,the preparation of the Defeasance Security Agreement and related documentation); and
(c) Borrower shall have paid on or prior to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including Release Date (but after the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicableClosing), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Owners shall deliver to Lender the following itemsMortgagee:
(i) a pledge and security agreement, in form and substance satisfying the Prudent Lender Standardsatisfactory to Mortgagee in its sole discretion, creating a first priority perfected Lien on the Defeasance Deposit and security interest in favor of Mortgagee in the Defeasance Collateral (the “Defeasance Security Agreement”),, which shall provide, among other things, that any excess received by Mortgagee from the Defeasance Collateral over the amounts payable by the Property Owners under the Loan Documents shall be refunded to the Property Owners promptly after each Payment Date;
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien certificate of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower Owners certifying that all of the requirements set forth in this Section 2.10 7.02 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(iviii) an opinion of counsel for the Property Owners in form and substance satisfying the Prudent Lender Standard and delivered by counsel satisfactory to Mortgagee in its sole discretion stating, among other things, that (A1) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender Mortgagee has a perfected first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and that the Proceeds thereof Defeasance Security Agreement is enforceable against the Property Owners in accordance with its terms and (2) that any REMIC Trust formed pursuant to a Securitization (as defined in the Mortgages) will not fail to maintain its status as a "real estate mortgage investment conduit" within the meaning of Section 860D of the Code as a result of the Defeasance;
(iv) the Property Owners shall deliver evidence in writing from the applicable Rating Agencies (as defined in the Loan Documents) to the effect that the collateral substitution effected as part of the Defeasance will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to the Defeasance for any securities issued in connection with the Securitization which are then outstanding;
(v) a certificate from a firm of independent public accountants acceptable to Mortgagee certifying that the Defeasance Collateral is sufficient to provide for payments (A) on or prior to, but as close as possible to, all successive scheduled Payment Dates after the Release Date through the Maturity Dates (as defined in the Loan Documents), and (B) that in amounts equal to or greater than the subject Partial Defeasance will not adversely affect Monthly Debt Service Payment Amounts (as defined in the status Loan Documents) required under the Notes through the Maturity Dates together with payment in full of any REMIC formed in connection with a Secondary Market Transaction, the unpaid principal balance of the Notes as of the respective Maturity Dates; and
(vvi) such other certificates, documents or instruments as Lender Mortgagee may reasonably request includingrequire. The Surviving Entities shall pay all reasonable and customary costs, without limitation, (A) written confirmation from expenses or fees imposed by the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency Lender to withdraw, qualify or downgrade effect the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with Defeasance. Each party hereto agrees to use all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect commercially reasonable efforts to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance reasonably cooperate with the Prudent Lender StandardProperty Owners in their efforts to effect the Defeasance. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents The ARA Companies and the Security Agreement, together with AII Companies shall not permit the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition Property Owners to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and modify any of the Loan Documents as prior to the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by LenderClosing without the GDC Owners’ prior written consent, including Lender’s reasonable attorney’s fees and expenses, incurred which consent may be granted in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)their sole discretion.
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Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Defeasance Lockout Release Date and prior to the Start-Up Day Open Period Start Date to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen sixty (1560) days prior written days’ notice to (or such shorter period of time if permitted by Lender in its sole discretion) but not more than ninety (90) days’ notice specifying (i) a Payment Date date (the “Total Defeasance Release Date”) on which the Full Total Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender (A) all reasonable out-of-pocket fees payments of principal and expenses associated with interest due and payable on the Full Loan to and including the Total Defeasance or Partial DefeasanceDate; (B) all other sums, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents,Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, appraisal, Rating Agency and other fees, costs and expenses paid or incurred by Lender or its agents in connection with the Total Defeasance Event, the release of the lien of Security Instrument on the Property, the review of the proposed Total Defeasance Collateral and the preparation of the Security Agreement and related documentation; and (D) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of the Note and/or the Total Defeasance Event;
(eiii) Borrower shall either deposit with Lender an amount equal to the Total Defeasance Collateral into the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Total Defeasance Collateral;
(gv) Borrower shall deliver to Lender the following items:
an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (iA) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; and (B) if a Securitization has occurred (1) the REMIC Trust formed pursuant to such Securitization and/or any subsequent or prior Securitization of the Loan or any portion thereof or interest therein will each not fail to maintain their respective status as a “Security Agreement”),real estate mortgage investment conduit” within the meaning of Section 860D of the IRS Code as a result of a Total Defeasance Event pursuant to this Section 2.8 and (2) the Total Defeasance Event would neither (I) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.860G-2(b) nor (II) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the IRS Code;
(iivi) for execution by Lender, Borrower shall deliver to Lender a release of each applicable Individual Property being defeased from Rating Agency Confirmation as to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,Total Defeasance Event;
(iiivii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied satisfied;
(viii) Borrower shall deliver a certificate of a “big four” or other nationally recognized public accounting firm acceptable to Lender certifying that the Total Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all costs and expenses of Lender incurred in connection with the Total Defeasance Event, including, without limitation, that no Event of Default has occurred Lender’s reasonable attorneys’ fees and is continuing,expenses and Rating Agency fees and expenses.
(ivb) an opinion of counsel in form If Borrower has elected to defease the entire Note and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall thereafter no longer be subject to restrictions on transfer set forth hereinthe sole source of collateral securing the Note. In connection with a defeasance the release of the Loanlien, Borrower shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Total Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a release of lien (and related Loan Documents) for execution by Lender. Such release shall be in a Special-Purpose Entity (form appropriate in the “Successor Obligor”)jurisdiction in which the Property is located and shall contain standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreementdocumentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, an Officer’s Certificate certifying that such documentation (i) is in a writing or writings satisfying the Prudent Lender Standard, compliance with all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerApplicable Law, and (ii) will affect such release in accordance with the enforceability terms of the assignment documents and of the Loan Documents as the obligation of Successor Borrowerthis Agreement. Borrower shall pay all out-of-pocket costs costs, taxes and expenses incurred by Lenderassociated with the release of the lien of the Security Instrument, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)attorneys’ fees.
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Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lxxxxx has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Lxxxxx receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Lxxxxx will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the The Defeasance Release Date,
Notice must be accompanied by a $10,000 non-refundable fee (d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full “Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased NoteFee”). The Defeased Note and If Lender does not receive the Undefeased Note shall have terms identical Defeasance Fee, then Bxxxxxxx’s right to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents obtain Defeasance pursuant to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:that Defeasance Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)11.
Appears in 1 contract
Samples: Multifamily Loan and Security Agreement (Sentio Healthcare Properties Inc)
Defeasance. Borrower shall With respect to any Mortgage Loan that contains a provision for any defeasance of mortgage collateral (a "Defeasance Loan"), the related Mortgage Note or Mortgage provides that the defeasance option is not be permitted exercisable prior to a date that is at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is least two (2) years after following the Start-Up Day of the last Note securitizedClosing Date and is otherwise in compliance with applicable statutes, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days rules and regulations governing REMICs; requires prior written notice to Lender specifying the holder of the Mortgage Loan of the exercise of the defeasance option and payment by Borrower of all related reasonable fees, costs and expenses as set forth below; requires, or permits the lender to require, the Mortgage Loan (ior the portion thereof being defeased) to be assumed by a Payment Date single-purpose entity; and requires counsel to provide a legal opinion that the Trustee has a perfected security interest in such collateral prior to any other claim or interest. In addition, each Mortgage loan that is a Defeasance Loan permits defeasance only with substitute collateral constituting "government securities" within the meaning of Treas. Reg. Section 1.860G-2(a)(8)(i) in an amount sufficient to make all scheduled payments under the Mortgage Note (or the “Defeasance Release Date”portion thereof being defeased) on which the Full Defeasance or Partial Defeasance is to occurwhen due, and (ii) in the event case of a Partial DefeasanceARD Loans, assuming the Individual Property proposed to be defeased; providedAnticipated Repayment Date is the Maturity Date. To Seller's actual knowledge, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable defeasance under the Mortgage Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent is only for the purpose of applying facilitating the disposition of a Mortgaged Property and not as part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages. With respect to each Defeasance Deposit to purchase Loan, except as set forth on Schedule C-29, the Defeasance Collateral,
(f) related Mortgage or other related loan document provides that the related Borrower shall execute (a) pay all Rating Agency fees associated with defeasance (if rating confirmation is a specific condition precedent thereto) and deliver to Lender all documents reasonably other reasonable expenses associated with defeasance, including, but not limited to, accountant's fees and opinions of counsel, or (b) provide all opinions required by Lender (i) under the related loan documents, including, if applicable, a REMIC opinion and a perfection opinion and any applicable rating agency letters confirming no downgrade or qualification of ratings on any classes in the case of a Full Defeasancetransaction. Additionally, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the for any Mortgage Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the thenCut-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be off Date Principal Balance equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance$19,900,000, the RevPAR with respect to Mortgage Loan or the Individual Properties securing related documents require confirmation from the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all Rating Agency that exercise of the Individual Properties as defeasance option will not cause a downgrade or withdrawal of the Closing Date, rating assigned to any securities backed by the Mortgage Loan and (ii) RevPAR with respect require the Borrower to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s any Rating Agency fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 1 contract
Samples: Mortgage Loan Purchase Agreement (Credit Suisse Fr Bs Mor Sec Cp Com Mor Ps Th Ce Ser 2001-Ck1)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Release Date and prior to the Start-Up Day Maturity Date to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen thirty (1530) days prior written notice to (or such shorter period of time if permitted by Lender in its reasonable discretion) but not more than sixty (60) days notice specifying (i) a Payment Date date (the “Total Defeasance Release Date”) on which the Full Total Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender (A) all reasonable out-of-pocket fees payments of principal and expenses associated with interest due and payable on the Full Loan to and including the Total Defeasance or Partial DefeasanceDate (provided that, as applicable if such Total Defeasance Date is not a Monthly Payment Date, Borrower shall also pay to Lender all payments of principal and interest due on the Loan to and including the next occurring Monthly Payment Date); (includingB) all other sums, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents,Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, Rating Agency and other out-of-pocket fees, costs and expenses paid or incurred by Lender or its agents in connection with the Total Defeasance Event, the release of the lien of Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement and related documentation; and (D) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of the Note and/or the Total Defeasance Event.
(eiii) Borrower shall either deposit with Lender an amount equal to the Total Defeasance Collateral into the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower shall execute and deliver to Lender all documents a Security Agreement, in form and substance reasonably required by Lender (i) satisfactory to Lender, in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Total Defeasance Collateral;
(gv) Borrower shall deliver to Lender the following items:
(i) a security agreementan opinion of counsel for Borrower, in form and substance satisfying the Prudent reasonably satisfactory to Lender Standardand delivered by counsel reasonably satisfactory to Lender, creating that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (A) Lender has a legal and valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) if a Securitization has occurred (1) the REMIC Trust formed pursuant to such Securitization and/or any subsequent or prior Securitization of the Loan or any portion thereof or interest therein will each not fail to maintain their respective status as a “Security Agreement”),real estate mortgage investment conduit” within the meaning of Section 860D of the IRS Code as a result of a Total Defeasance Event pursuant to this Section 2.8 and (2) the Total Defeasance Event would not (I) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.1001-3 or (II) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the IRS Code; (C) the Total Defeasance Event will not result in a deemed exchange for purposes of the IRS Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes; (D) delivery of the Total Defeasance Collateral and the grant of a security interest therein to Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law; and (E) a New Non- Consolidation Opinion with respect to the Successor Borrower;
(iivi) for execution by Lender, Borrower shall deliver to Lender a release of each applicable Individual Property being defeased from Rating Agency Confirmation as to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,Total Defeasance Event;
(iiivii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivviii) an opinion Borrower shall deliver a certificate of counsel in form and substance satisfying a “big four” or other nationally recognized public accounting firm acceptable to Lender certifying that the Prudent Lender Standard stating, among other things, (A) that, the Total Defeasance Collateral has been duly and validly assigned and delivered will generate monthly amounts equal to Lender and Lender has a first priority perfected security interest in and Lien on or greater than the Scheduled Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, Payments; and
(vix) Borrower shall deliver such other certificates, opinions, documents or and instruments as Lender may reasonably request including, without limitation, request.
(Ab) written confirmation from If Xxxxxxxx has elected to defease the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction entire Note and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall thereafter no longer be subject to restrictions on transfer set forth hereinthe sole source of collateral securing the Note. In connection with a defeasance the release of the Loanlien, Borrower shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Total Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a release of lien (and related Loan Documents) for execution by Xxxxxx. Such release shall be in a Specialform appropriate in the jurisdiction in which the Property is located and shall contain standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all Applicable Law, and (ii) will affect such release in accordance with the terms of this Agreement. Borrower shall pay all actual out-Purpose Entity of-pocket costs, taxes and expenses associated with the release of the lien of the Security Instrument, including Xxxxxx’s reasonable attorneys’ fees. Except as set forth in this Article 2, no repayment, prepayment or defeasance of all or any portion of the Note shall cause, give rise to a right to require, or otherwise result in, the release of the lien of the Security Instrument.
(c) At Borrower’s sole cost and expense, Lender shall use commercially reasonable efforts to cooperate with Xxxxxxxx to avoid the incurrence of mortgage recording taxes in connection with a Total Defeasance Event.
(d) On or before the date on which Borrower delivers the Total Defeasance Collateral, Borrower or Successor Borrower (as applicable) shall open at any Eligible Institution an Eligible Account (the “Successor ObligorDefeasance Collateral Account”). The Defeasance Collateral Account shall contain only (i) Total Defeasance Collateral, and (ii) cash from interest and principal paid on the Total Defeasance Collateral. All cash from interest and principal payments paid on the Total Defeasance Collateral shall be paid over to Lender on each Monthly Payment Date and applied first to accrued and unpaid interest and then to principal. Any cash from interest and principal paid on the Total Defeasance Collateral not needed to pay the Scheduled Defeasance Payments shall be paid to Borrower or Successor Borrower (as applicable). Borrower or Successor Borrower (as applicable) shall cause the Eligible Institution at which the Total Defeasance Collateral is deposited to enter into an agreement with Borrower or Successor Borrower (as applicable) and Lender, satisfactory to Lender in its sole discretion, pursuant to which such Eligible Institution shall agree to hold and distribute the Total Defeasance Collateral in accordance with this Agreement. Borrower or Successor Borrower (as applicable) shall be the owner of the Defeasance Collateral Account and shall report all income accrued on Total Defeasance Collateral for federal, state and local income tax purposes in its income tax return. Borrower shall prepay all cost and expenses associated with opening and maintaining the Defeasance Collateral Account. Lender shall not in any way be liable by reason of Borrower’s obligations any insufficiency in the Defeasance Collateral Account.
(e) In connection with a Total Defeasance Event under this Section 2.8, Borrower shall transfer and assign all obligations, rights and duties under and to the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Total Defeasance CollateralCollateral to a newly-created successor entity, which entity shall be a Single Purpose Entity and which entity shall be designated or established by Borrower (the “Successor Borrower”). The Such Successor Obligor Borrower shall assume, in a writing or writings satisfying assume the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, and Borrower shall, except as set forth herein, shall be relieved of its obligations hereunder. If under the Loan Documents (other than those obligations which by their terms survive a Successor Borrower assumes Borrower’s obligationsrepayment, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s defeasance or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and other satisfaction of the Loan Documents and/or a transfer of the Property in connection with Xxxxxx’s exercise of its remedies under the Loan Documents). Borrower shall pay $1,000 to any such Successor Borrower as consideration for assuming the obligation of Successor Borrowerobligations under the Note and the Security Agreement. Borrower shall pay all actual out-of-pocket costs and reasonable expenses incurred by LenderXxxxxx, including Lenderthe cost of establishing the Successor Borrower and Xxxxxx’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of therewith.
(f) Notwithstanding anything to the Loan, the Security Agreement and the Defeasance Collateral. Nothing contrary contained in this Section 2.10 shall release Borrower from 2.8, the parties hereto hereby acknowledge and agree that after the Securitization of the Loan (or any liability portion thereof or obligation relating interest therein), with respect to any environmental Lender approval or similar discretionary rights over any matters arising under contained in this Section 5.1(F(any such matter, a “Defeasance Approval Item”), such rights shall be construed such that Lender shall only be permitted to withhold its consent or approval with respect to any Defeasance Approval Item if the same fails to meet the Prudent Lender Standard.
Appears in 1 contract
Samples: Loan Agreement
Defeasance. (i) Borrower shall not be permitted have the right at any time after the Release Date and prior to defease all or any portion the First Open Payment Date to obtain a release of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day Lien of the last Note securitized, Borrower may voluntarily defease all of Mortgage encumbering the Loan Property (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the upon satisfaction of the following conditions precedentconditions:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made provide Lender at least thirty (30) days’ prior written notice (or such shorter period of time if permitted by Lender in its sole discretion) specifying a date (the “Defeasance Date”) on a Payment Date,which Borrower shall have satisfied the conditions in this Section 2.3(A) and on which it shall effect the Defeasance;
(b) Borrower shall provide not less than fifteen (15) days prior written notice pay to Lender specifying (iA) a Payment all payments of interest due on the Loan to and including the Defeasance Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (iiB) in all other sums, then due under the event of a Partial DefeasanceNote, this Loan Agreement, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease Mortgage and the other Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Documents;
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including irrevocably deposit the Defeasance Release Date,Collateral into the Defeasance Collateral Account and otherwise comply with the provisions of Sections 2.3(B) and (C) hereof;
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably a Security Agreement in respect of the Defeasance Collateral Account and the Defeasance Collateral;
(e) Borrower shall deliver to Lender an opinion of counsel for Borrower that is customary in commercial lending transactions and subject only to normal qualifications, assumptions and exceptions opining, among other things, that (v) Lender has a legal and valid perfected first priority security interest in the Defeasance Collateral Account and the Defeasance Collateral, (w) if a Securitization has occurred, the REMIC Trust formed pursuant to such Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the defeasance pursuant to this Section 2.3(A), (x) a defeasance pursuant to this Section 2.3(A) will not result in a deemed exchange for purposes of the Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes, (y) delivery of the Defeasance Collateral and the grant of a security interest therein to 21 Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law and (z) if and to the extent required by the Rating Agencies, a non-consolidation opinion with respect to the Successor Borrower;
(f) Borrower shall deliver to Lender (ia confirmation in writing from the applicable Rating Agencies to the effect that the release of the Property from the Lien of the Mortgage as contemplated by this Section 2.3(A) in and the case substitution of a Full Defeasance, to amend and restate the Note Defeasance Collateral will not result in a principal amount equal to the then outstanding principal balance downgrading, withdrawal or qualification of the Loan (the “Full Defeased Note”), and (ii) respective ratings in the case of a Partial Defeasance, effect immediately prior to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except such defeasance for the principal balance and a pro rata allocation of Certificates issued in connection with the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Securitization which are then outstanding;
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officerofficer’s Certificate of Borrower certificate certifying that the requirements set forth in this Section 2.10 2.3(A) have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivh) an opinion Borrower shall deliver a certificate of counsel in form and substance satisfying the Prudent a nationally recognized public accounting firm reasonably acceptable to Lender Standard stating, among other things, (A) that, certifying that the Defeasance Collateral has been duly and validly assigned and delivered will generate monthly amounts equal to Lender and Lender has a first priority perfected security interest in and Lien on or greater than the Scheduled Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, andPayments;
(vi) Borrower shall deliver such other certificates, opinions, documents or and instruments as Lender may reasonably request including, without limitation, request; and
(Aj) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued Borrower shall pay all costs and expenses of Lender incurred in connection with any Secondary Market Transaction the defeasance, including Lender’s reasonable attorneys’ fees and expenses and Rating Agency fees and expenses.
(Bii) If a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with occurs and all of the requirements of this Section 2.10,
(h) In 2.3 have been satisfied, Lender shall execute any and all documents required to release the case Property from the Lien of a Partial Defeasancethe Mortgage and the Assignment of Leases and the Defeasance Collateral, the Debt Service Coverage Ratio with respect pledged pursuant to the Undefeased Note Security Agreement, shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case sole source of a Partial Defeasance, the RevPAR with respect to the Individual Properties collateral securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth hereinNote. In connection with a defeasance the release of the LoanLien, Borrower shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Defeasance Date (or such shorter time as permitted by Lender in its sole discretion), a release of Lien (and related Loan Documents) for execution by Lender. Such release shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying form appropriate in the Prudent Lender Standard, all jurisdiction in which the Property is located and contain standard provisions protecting the rights of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignmenta releasing lender. In addition, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as shall provide all other documentation Lender reasonably deems necessary requires to confirm the valid creation and authority of the Successor be delivered by Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrowerin connection with such release. Borrower shall pay all out-of-pocket costs costs, taxes and expenses incurred by Lenderassociated with the release of the Lien of the Mortgage and the Assignment of Leases, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateralattorneys’ fees. Nothing Except as set forth in this Section 2.10 2.3, no repayment, prepayment or defeasance of all or any portion of the Note shall cause, give rise to a right to require, or otherwise result in, the release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)of the Lien of the Mortgage on the Property.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Defeasance Lockout Release Date and prior to the Start-Up Day Open Period Start Date to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen sixty (1560) days prior written days’ notice to (or such shorter period of time if permitted by Lender in its sole discretion) but not more than ninety (90) days’ notice specifying (i) a Payment Date date (the “Total Defeasance Release Date”) on which the Full Total Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender (A) all reasonable out-of-pocket fees payments of principal and expenses associated with interest due and payable on the Full Loan to and including the Total Defeasance or Partial DefeasanceDate; (B) all other sums, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents,Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, appraisal, Rating Agency and other fees, costs and expenses paid or incurred by Lender or its agents in connection with the Total Defeasance Event, the release of the lien of Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement and related documentation; and (D) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of the Note by the Successor Borrower and/or the Total Defeasance Event.
(eiii) Borrower shall either deposit with Lender an amount equal (or cause to be deposited) the Total Defeasance Collateral into the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Total Defeasance Collateral;
(gv) Borrower shall deliver to Lender the following items:
one (i1) or more opinions of counsel for Borrower that are standard in commercial defeasance transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (A) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) if a Securitization has occurred (1) neither the REMIC Trust formed pursuant to such Securitization nor any subsequent or prior Securitization of the Loan or any portion thereof or interest therein will fail to maintain its respective status as a “Security Agreement”),real estate mortgage investment conduit” within the meaning of Section 860D of the IRS Code as a result of a Total Defeasance Event pursuant to this Section 2.8 and (2) the Total Defeasance Event would neither (I) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.860G02(b)(2) nor (II) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the IRS Code; and (C) intentionally omitted;
(iivi) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of If required pursuant to the applicable Mortgage in pooling and servicing agreement and/or as may be required by the applicable Rating Agencies, Borrower shall deliver to Lender a form appropriate for Rating Agency Confirmation as to the jurisdiction in which such Individual Property is located,Total Defeasance Event;
(iiivii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied satisfied;
(viii) Borrower shall deliver a certificate of a “big four” or other nationally recognized public accounting firm acceptable to Lender (or from an independent certified public accountant reasonably acceptable to Lender) certifying that the Total Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all costs and expenses of Lender incurred in connection with the Total Defeasance Event, including, without limitation, that no Event of Default has occurred Lender’s reasonable attorneys’ fees and is continuing,expenses and Rating Agency fees and expenses.
(ivb) an opinion of counsel in form If Borrower has elected to defease the entire Note and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall thereafter no longer be subject to restrictions on transfer set forth hereinthe sole source of collateral securing the Note. In connection with a defeasance the release of the Loanlien, Borrower shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Total Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a release of lien (and related Loan Documents) for execution by Lender. Such release shall be in a Special-Purpose Entity (form appropriate in the “Successor Obligor”)jurisdiction in which the Property is located and shall contain standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreementdocumentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, an Officer’s Certificate certifying that such documentation (i) is in a writing or writings satisfying the Prudent Lender Standard, compliance with all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerApplicable Law, and (ii) will affect such release in accordance with the enforceability terms of the assignment documents and of the Loan Documents as the obligation of Successor Borrowerthis Agreement. Borrower shall pay all out-of-pocket costs costs, taxes and expenses incurred by Lenderassociated with the release of the lien of the Security Instrument, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)attorneys’ fees.
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Defeasance. Borrower shall not be permitted at (a) At any time to defease all or any portion other than during the continuance of the Loan except as expressly provided in this Section 2.10. Provided that no Event Prepayment Period for a Series of Default has occurred and is continuingOutstanding Term Notes, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject upon 10 Business Days’ notice to the satisfaction Indenture Trustee, the Issuer may obtain the release from all covenants of this Indenture relating to the following conditions precedent:ownership and
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Class Principal Indebtedness Balance of each Class of Outstanding Term Notes to and but not including the Defeasance Release Date (and if the Defeasance Date is not a Payment Date,
(d) Borrower shall pay , the interest that would have accrued to Lender all reasonable out-of-pocket fees and expenses associated with but not including the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicablenext Payment Date), reasonable fees and out-of-pocket costs of any loan servicer (if anyb) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Term Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver Payments with respect to Lender the Defeasance Collateraleach Series of then Outstanding Term Notes. In connection with addition, the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuer shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has Indenture Trustee a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on U.S. government securities so delivered by the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitationIssuer, (A2) written confirmation from an Opinion of Counsel as to the relevant Rating Agencies that enforceability and perfection of such Partial Defeasance will not cause any Rating Agency to withdrawsecurity interest, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B3) a certificate from confirmation by an Independent certified public accountant certifying accounting firm that the U.S. government securities so delivered are sufficient to pay all Scheduled Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio Payments with respect to each Series of Outstanding Notes, and (4) a Rating Agency Confirmation. The Issuer, pursuant to the Undefeased Note security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be equal made directly to the Indenture Trustee and applied to satisfy the obligations of the Issuer under the Notes and the other Transaction Documents.
(b) If the Asset Entities will continue to own any material assets other than the U.S. government securities delivered in connection with the defeasance, the Issuer shall establish or greater than designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee (with respect to which (i) 1.51:1.00, a substantive non-consolidation Opinion of Counsel has been delivered to the Indenture Trustee and (ii) the Debt Service Coverage Ratio with respect an Opinion of Counsel has been delivered to the Loan for Indenture Trustee that the trailing twelve (12) months immediately prior Issuer will not be required to register as an investment company under the Investment Company Act), and to transfer to that entity the pledged U.S. government securities. The new entity shall assume the obligations of the Issuer under the Notes being defeased and the security agreement and the Obligors and the Guarantor shall be relieved of their obligations in respect thereof under the Transaction Documents. The Issuer shall pay $10 to such Partial Defeasance, andnew entity as consideration for assuming such obligations.
(ic) In If the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with Issuer satisfies the requirements of this Section 2.102.11(a) to defease the Notes and delivers to the Indenture Trustee an Officer’s Certificate of the Issuer and an Opinion of Counsel in compliance with Section 15.01, the Individual Property which is Indenture Trustee shall promptly execute, acknowledge and deliver to the subject of such Full Defeasance or Partial Defeasance shall be released from the lien Obligors a release of the Collateral under the applicable MortgageTransaction Documents in recordable form to the extent applicable for such release; provided that the Obligors shall, at their sole expense, prepare any and all documents and instruments necessary to effect such release, all of which shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance the reasonable approval of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerIndenture Trustee, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower Obligors shall pay all out-of-pocket costs and expenses reasonably incurred by Lenderthe Indenture Trustee (including, including Lender’s but not limited to, reasonable attorney’s attorneys’ fees and expenses, incurred disbursements) in connection with Successor Borrower’s assumption the review, execution and delivery of the Loan, the Security Agreement documents and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating instruments necessary to any environmental matters arising under Section 5.1(F)effect such release.
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Defeasance. Borrower shall not be permitted at (a) At any time prior to defease the Payment Date that is six (6) months prior to the Anticipated Repayment Date of any outstanding Series (such Payment Date, the “Defeasance Payment Date”), the Issuers may obtain the release from all or any portion covenants of this Indenture relating to ownership of the Loan except as expressly provided Assets by delivering United States government securities that provide for payments on each Payment Date which replicate the required payments and scheduled amortization payments due under the Transaction Documents with respect to all of the Notes then outstanding, including without limitation the Indenture Trustee Fee and any other amounts due and owing to the Indenture Trustee and the Backup Manager, Custodial Fee and any other amounts due and owing to the Custodian, Workout Fees, Servicing Fee, Other Servicing Fees and any other amounts due and owing to the Servicer, if any, through the Defeasance Payment Date for each Series of Notes (including payment in this Section 2.10. Provided full of the principal of the Notes on the related Defeasance Payment Date); provided, that (i) no Event of Default has occurred and is continuing, after continuing and (ii) the Issuers shall pay or deliver on the date which is two of such defeasance (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Date”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Outstanding Class Principal Indebtedness Balance of each Class of Notes to and but not including the Defeasance Release Date (and, if the Defeasance Date is not a Payment Date,
(d) Borrower shall pay , the interest that would have accrued to Lender all reasonable out-of-pocket fees and expenses associated with but not including the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicablenext Payment Date), reasonable fees and out-of-pocket costs of any loan servicer (if anyb) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance CollateralPayments. In connection with addition, the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuers shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has Indenture Trustee a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on U.S. government securities so delivered by the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitationIssuers, (A2) written confirmation from an Opinion of Counsel as to the relevant Rating Agencies that enforceability and perfection of such Partial Defeasance will not cause any Rating Agency to withdrawsecurity interest, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B3) a certificate from confirmation by an Independent certified public accountant certifying accounting firm that the U.S. government securities so delivered are sufficient to pay all interest due from time to time after the Defeasance Collateral complies with Date (or if the Defeasance Date is not a Payment Date, due after the next Payment Date) and all principal due upon maturity for each Class of Notes, and all Indenture Trustee Fee, Custodial Fee and Workout Fees, if any and (4) a Rating Agency Confirmation. The Issuers, pursuant to the security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be made directly to the Indenture Trustee and applied to satisfy the obligations of the requirements of this Section 2.10,Issuers under the Notes and the other Transaction Documents.
(hb) In If the case of a Partial DefeasanceAsset Entities will continue to own any material assets other than the U.S. government securities delivered in connection with the defeasance, the Debt Service Coverage Ratio Issuers shall establish or designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee, with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect which a substantive non-consolidation Opinion of Counsel reasonably satisfactory to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect Indenture Trustee has been delivered to the Individual Properties securing Indenture Trustee and to transfer to that entity the Undefeased Note pledged U.S. government securities. The new entity shall be equal to or greater than (i) RevPAR with respect to all assume the obligations of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations Issuers under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents Notes being defeased and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents security agreement and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, Obligors and the Guarantors shall be relieved of its their obligations hereunderin respect thereof under the Transaction Documents. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition The Issuers shall pay Ten Dollars ($10) to such defeasance, new entity as consideration for assuming such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)obligations.
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Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Multifamily Loan and Security Agreement Page 85 (Park at Kensington) Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Lender receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”) for Lender’s processing of the Defeasance. If Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including does not receive the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial DefeasanceFee, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the right to obtain Defeasance Deposit pursuant to purchase the that Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)11.
Appears in 1 contract
Samples: Multifamily Loan and Security Agreement (Resource Apartment REIT III, Inc.)
Defeasance. Borrower shall not be permitted at (a) At any time prior to defease all or any portion the Payment Date that is six months prior to the Applicable Maturity Date of the Loan except as expressly provided in Class of Notes having the latest maturity, the Issuers may (upon 30 days’ written notice to the Indenture Trustee) obtain the release from all covenants under this Section 2.10. Provided that no Event of Default has occurred Indenture relating to ownership and is continuing, after the date which is two (2) years after the Start-Up Day operation of the last Note securitized, Borrower may voluntarily defease Tower Sites by defeasing all of the Loan (a “Full Defeasance”) or a portion of Notes then outstanding with U.S. government securities that provide for payments which replicate the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:required payments
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Outstanding Class Principal Indebtedness Balance of each Class of Notes to and but not including the Defeasance Release Date,
, (db) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”)Payments. The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuers shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee, (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating Indenture Trustee a first priority perfected Lien on the Defeasance Deposit U.S. government securities so delivered by the Issuers, (2) an Opinion of Counsel as to the enforceability and perfection of such Lien, (3) a confirmation by an independent certified public accounting firm that the U.S. government securities so delivered are sufficient to pay all interest due from time to time and all principal due upon maturity for each Class of Notes, and all Indenture Trustee Fees, Servicing Fees and Workout Fees, if any, and (4) a Rating Agency Confirmation from each Rating Agency. The Issuers, pursuant to the security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be made directly to the Indenture Trustee and applied to satisfy the obligations of the Issuers under the Notes and the Defeasance Collateral (the “Security Agreement”),Transaction Documents.
(iib) for execution by Lender, a release of each applicable Individual Property being defeased from If the lien of Issuers will continue to own any assets other than the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and U.S. government securities delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasancedefeasance, the Debt Service Coverage Ratio Issuers shall establish or designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee and the Servicer, with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect which a substantive nonconsolidation opinion satisfactory to the Loan for Indenture Trustee has been delivered to the trailing twelve (12) months immediately prior Indenture Trustee and to such Partial Defeasance, and
(i) In transfer to that entity the case pledged U.S. government securities. The new entity shall assume the obligations of a Partial Defeasancethe Issuers under the Notes, the RevPAR with respect to security agreement and the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Transaction Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor Issuers shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its their obligations hereunderthereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition The Issuers shall pay $10 to such defeasance, new entity as consideration for assuming such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority obligations of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Issuers.
Appears in 1 contract
Defeasance. Borrower shall With respect to any Mortgage Loan that contains a provision for any defeasance of mortgage collateral (a "Defeasance Loan"), the related Note or Mortgage provides that the defeasance option is not be permitted exercisable prior to a date that is at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is least two (2) years after following the Start-Up Day of the last Note securitizedClosing Date and is otherwise in compliance with applicable statutes, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days rules and regulations governing REMICs; requires prior written notice to Lender specifying the holder of the Mortgage Loan of the exercise of the defeasance option and payment by Borrower of all related reasonable fees, costs and expenses as set forth below; requires the Mortgage Loan (ior the portion thereof being defeased) to be assumed by a Payment Date (Single-Purpose Entity; and requires counsel to provide a legal opinion that the “Trustee has a perfected security interest in substitute collateral described below prior to any other claim or interest. In addition, each Mortgage Loan that is a Defeasance Release Date”) on which Loan permits defeasance only with substitute collateral constituting non-callable "government securities" within the Full Defeasance or Partial Defeasance is to occur, and (iimeaning of Treas. Reg.
Section 1. 860G-2(a)(8)(i) in the event of a Partial Defeasance, the Individual Property proposed an amount sufficient to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender make all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable scheduled payments under the Loan Documents,
Note (e) Borrower shall either deposit with Lender an amount equal to or the Defeasance Depositportion thereof being defeased, or, at Lender’s requestif such partial release involves the release of one or more Mortgaged Properties from a multi-property Mortgage Loan, 125% of the allocated loan amount for such released Mortgaged Properties) when due, and in the case of ARD Loans, assuming the Anticipated Repayment Date is the Maturity Date; and such Borrower is required to deliver from an independent accountant a letter certifying that such substitute collateral is sufficient to Lender make all scheduled payments under the Defeasance CollateralNote. In connection with To Seller's actual knowledge, defeasance under the foregoing, Borrower appoints Lender as Borrower’s agent Mortgage Loan is only for the purpose of applying facilitating the disposition of a Mortgaged Property and not as part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages. With respect to each Defeasance Deposit to purchase Loan, the Defeasance Collateral,
(f) related Note or Mortgage or other related loan document provides that the related Borrower shall execute (a) pay all Rating Agency fees associated with defeasance (if Rating Agency approval is a specific condition precedent thereto) and deliver all other reasonable expenses associated with defeasance, including, but not limited to, accountant's fees and opinions of counsel, or (b) provide all opinions required under the related loan documents, including, if applicable, a REMIC opinion and an opinion that the related security agreement is fully enforceable in accordance with its terms (subject to Lender all documents reasonably required applicable bankruptcy, insolvency, reorganization, receivership, moratorium, and other laws affecting the enforcement of creditors' rights generally, and by Lender (igeneral principles of equity) and any applicable rating agency letters confirming no downgrade or qualification of ratings on any classes in the case of a Full Defeasancetransaction. Additionally, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the for any Mortgage Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the thenCut-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be off Date Principal Balance equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance$20,000,000, the RevPAR with respect to Mortgage Loan or the Individual Properties securing related documents require confirmation from the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all Rating Agency that exercise of the Individual Properties as defeasance option will not cause a downgrade or withdrawal of the Closing Date, rating assigned to any securities backed by the Mortgage Loan and (ii) RevPAR with respect require the Borrower to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs any Rating Agency fees and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)defeasance.
Appears in 1 contract
Samples: Mortgage Loan Purchase Agreement (Credit Suisse First Boston Mortgage Securities Corp)
Defeasance. Borrower shall not be permitted at (a) At any time prior to defease the Payment Date that occurs prior to the Prepayment Period of any outstanding Series (such Payment Date, the “Defeasance Payment Date”), the Issuer may obtain the release from all or any portion covenants of this Indenture relating to ownership and operation of the Loan except as expressly provided Cellular Sites by delivering United States government securities that provide for payments which replicate the required payments and scheduled amortization payments due under the Transaction Documents with respect to all of the Notes then outstanding, including without limitation, the Indenture Trustee Fee and any other amounts due and owing to the Indenture Trustee, if any, Workout Fees, Servicing Fees, Other Servicing Fees and any other amounts due and owing to the Servicer, if any, through the Defeasance Payment Date for each Series of Notes (including payment in this Section 2.10. Provided full of the principal of the Notes on the related Defeasance Payment Date); provided, that (i) no Event of Default has occurred and is continuing, after continuing and (ii) the Issuer shall pay or deliver on the date which is two of such defeasance (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Date”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Outstanding Class Principal Indebtedness Balance of each Class of Notes to and but not including the Defeasance Release Date (and, if the Defeasance Date is not a Payment Date,
(d) Borrower shall pay , the interest that would have accrued to Lender all reasonable out-of-pocket fees and expenses associated with but not including the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicablenext Payment Date), reasonable fees and out-of-pocket costs of any loan servicer (if anyb) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance CollateralPayments. In connection with addition, the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuer shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has Indenture Trustee a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on U.S. government securities so delivered by the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitationIssuer, (A2) written confirmation from an Opinion of Counsel as to the relevant Rating Agencies that enforceability and perfection of such Partial Defeasance will not cause any Rating Agency to withdrawsecurity interest, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B3) a certificate from confirmation by an Independent certified public accountant certifying accounting firm that the U.S. government securities so delivered are sufficient to pay all interest due from time to time after the Defeasance Collateral complies with Date (or if the Defeasance Date is not a Payment Date, due after the next Payment Date) and all principal due upon maturity for each Class of Notes, and all Indenture Trustee Fee and any other amounts due and owing to the Indenture Trustee, if any, Workout Fees, Servicing Fees, Other Servicing Fees and any other amounts due and owing to the Servicer, if any and (4) a Rating Agency Confirmation. The Issuer, pursuant to the security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be made directly to the Indenture Trustee and applied to satisfy the obligations of the requirements of this Section 2.10,Issuer under the Notes and the other Transaction Documents.
(hb) In If the case of a Partial DefeasanceAsset Entities will continue to own any material assets other than the U.S. government securities delivered in connection with the defeasance, the Debt Service Coverage Ratio Issuer shall establish or designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee, with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect which a substantive non-consolidation Opinion of Counsel reasonably satisfactory to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect Indenture Trustee has been delivered to the Individual Properties securing Indenture Trustee and to transfer to that entity the Undefeased Note pledged U.S. government securities. The new entity shall be equal to or greater than (i) RevPAR with respect to all assume the obligations of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations Issuer under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents Notes being defeased and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents security agreement and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, Obligors and the Guarantor shall be relieved of its their obligations hereunderin respect thereof under the Transaction Documents. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition The Issuer shall pay Ten Dollars ($10) to such defeasance, new entity as consideration for assuming such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)obligations.
Appears in 1 contract
Samples: Indenture (American Tower Corp /Ma/)
Defeasance. Borrower shall not be permitted 18.2.1 The Issuer may, at its option and at any time time, elect to defease all have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Security and Covenant Defeasance”):
(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Bondholders cash or government bonds accepted by the Bond Trustee (the “Defeasance Pledge”) in such amounts as will be sufficient for the payment of principal (including if applicable premium payable upon exercise of a Call Option or a Put Option) and interest on the Outstanding Bonds to Maturity Date (or redemption upon an exercise of a notified Call Option) or any portion of other amount agreed between the Loan except as expressly provided in this Section 2.10. Provided that Parties;
(b) no Event of Default has shall have occurred and is continuing, after be continuing on the date which is two (2) years after the Start-Up Day of establishment of the last Note securitizedDefeasance Pledge, Borrower may voluntarily defease all or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time during any hardening period applicable to the Defeasance Pledge (or the relevant period for non-Danish companies) or any other date agreed between the Parties;
(c) if the Bonds are secured, the Defeasance Pledge shall be considered as a replacement of the Loan Security established prior to the Defeasance Pledge;
(d) the Issuer shall have delivered to the Bond Trustee a “Full Defeasance”) or a portion certificate signed by its Chief Executive Officer stating that the Defeasance Pledge was not made by the Issuer with the intent of preferring the Bondholders over any other creditors of the Loan Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others; and
(e) the Issuer shall have delivered to the Bond Trustee any certificate or legal opinion reasonably required by the Bond Trustee regarding the Security and Covenant Defeasance or Defeasance Pledge, including any certificate or legal opinion on (i) the compliance of the conditions of the Security and Covenant Defeasance, (ii) that the Defeasance Pledge constitutes a “Partial Defeasance”)valid, perfected and enforceable Security in either case, favour of the Bond Trustee for the benefit of the Bondholders which will not be subject to any rights of creditors of any Obligor or any bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally under the satisfaction laws of the following conditions precedentjurisdiction where the Defeasance Pledge was established and the corporate domicile of the Issuer, (iii) any relevant tax issues concerning the Bondholders, (iv) any valuation of any assets or (vii) any other certificate or opinion regarding the Security and Covenant Defeasance or the Defeasance Pledge.
18.2.2 Upon the exercise by the Issuer of its option under Clause 18.2.1:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower all Obligors shall be made on a Payment Date,released from their obligations under all provisions in Clause 13, except Clauses 13.2.1(a), (e), (h), (i) and (j) and Clauses 13.4(b) and (c), or as otherwise agreed;
(b) Borrower the Obligors shall provide not less than fifteen (15and shall ensure that all Group Companies shall not) days prior written notice take any actions that may cause the value of the Security created by this Security and Covenant Defeasance to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurbe reduced, and (ii) in shall at the event request of a Partial Defeasancethe Bond Trustee execute, the Individual Property proposed or cause to be defeased; providedexecuted, thatsuch further documentation and perform such other acts as the Bond Trustee may reasonably require in order for the Security to remain valid, Borrower shall be required to defease enforceable and perfected by the Loan on Bond Trustee for the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to account of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Bondholders;
(c) Borrower any Guarantor(s) shall be discharged from their obligations under the Guarantee(s), and the Guarantee(s) shall cease to have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,any legal effect, or as otherwise agreed;
(d) Borrower any Security other than the Defeasance Pledge shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountantsbe discharged, and fees incurred in connection with the delivery Bond Trustee shall take all steps reasonably possible for it to cause such discharge to be effected, by way of opinion letters related deletion of the relevant Security Document from the relevant register, notice to such Full Defeasance third parties or Partial Defeasanceas otherwise required, or as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,otherwise agreed; and
(e) Borrower all other provisions of this Bond Agreement (except (a) – (c) above) shall either deposit with Lender an amount equal to remain fully in force without any modifications, or as otherwise agreed.
18.2.3 All amounts owed by the Issuer hereunder covered by the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” Pledge shall be deemed to mean applied by the Undefeased NoteBond Trustee, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements provisions of this Section 2.10Bond Agreement, against payment to the Individual Property which is Bondholders of all sums due to them under this Bond Agreement on the subject due date thereof. Any excess funds not required for the payment of such Full Defeasance or Partial Defeasance principal, premium and interest to the Bondholders (including any expenses, fees etc. due to the Bond Trustee hereunder) shall be released from returned to the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Issuer.
Appears in 1 contract
Samples: Bond Agreement
Defeasance. Borrower (a) Borrower, in its sole discretion, shall not be permitted have the right at any time after the Prepayment Lockout Release Date and prior to the Open Period Start Date to voluntarily defease all or any portion the entire Loan and obtain a release of the Loan except as expressly provided in this Section 2.10. Provided that no Event lien of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan Security Instruments by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen thirty (1530) days prior written days’ notice to (or such shorter period of time if permitted by Lender in its reasonable discretion) but not more than one hundred twenty (120) days’ notice specifying (i) a Payment Date date (the “Total Defeasance Release Date”) on which the Full Total Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender (A) all payments of principal and interest due and payable on the Loan to and including the Total Defeasance Date; (B) all other sums, if any, then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) and expenses related to escrow, closing, recording, legal, appraisal and other reasonable out-of-pocket fees, costs and expenses paid or incurred by Lender or its agents in connection with the Full Total Defeasance or Partial DefeasanceEvent, as applicablethe release of the lien of Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement and related documentation, and all fees of the Rating Agencies; and (D) any documentary stamp, intangible or other sums then similar taxes or similar charges or fees, in each case due and payable under in connection with the Loan Documents,transfer or assumption of the Note and/or the Total Defeasance Event.
(eiii) Borrower shall either deposit with Lender an amount equal to the Total Defeasance Collateral into the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Total Defeasance Collateral;
(gv) Borrower shall deliver to Lender the following items:
an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (iA) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) if a Securitization has occurred (1) the REMIC Trust formed pursuant to such Securitization and/or any subsequent or prior Securitization of the Loan or any portion thereof or interest therein will each not fail to maintain their respective status as a “Security Agreement”),real estate mortgage investment conduit” within the meaning of Section 860D of the IRS Code as a result of a Total Defeasance Event pursuant to this Section 2.8 and (2) the Total Defeasance Event would neither (I) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.860G-2(b) nor (II) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the IRS Code; and (C) a New Non-Consolidation Opinion with respect to the Successor Borrower;
(iivi) for execution by Lender, Borrower shall deliver to Lender a release of each applicable Individual Property being defeased from Rating Agency Confirmation as to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,Total Defeasance Event;
(iiivii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied satisfied;
(viii) Borrower shall deliver a certificate of an Acceptable Accountant certifying that the Total Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all reasonable out-of-pocket costs and expenses of Lender incurred in connection with the Total Defeasance Event, including, without limitation, that no Event Lender’s reasonable out-of-pocket attorneys’ fees and expenses and the fees and expenses of Default has occurred and is continuing,the Rating Agencies.
(ivb) an opinion of counsel in form If Borrower has elected to defease the entire Note and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall thereafter no longer be subject to restrictions on transfer set forth hereinthe sole source of collateral securing the Note. In connection with a defeasance the release of the Loanlien, Borrower shall assign submit to an entityLender, which entity which not less than ten (10) days prior to the Total Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a release of lien (and related Loan Documents) for execution by Lender. Such release shall be in a Specialform appropriate in the jurisdiction(s) in which the Property is located and shall contain standard provisions for such jurisdictions protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all Applicable Law, and (ii) will affect such release in accordance with the terms of this Agreement. Borrower shall pay all reasonable out-Purpose Entity of-pocket costs, taxes and expenses (other than any income, franchise or similar taxes of Lender) associated with the release of the lien of the Security Instrument, including Lender’s reasonable out-of-pocket attorneys’ fees. Lender shall, at Borrower’s sole cost and expense, reasonably cooperate in good faith with Borrower to avoid the incurrence of mortgage recording taxes in connection with a Total Defeasance Event.
(c) [Intentionally Omitted].
(d) On or before the date on which Borrower delivers the Total Defeasance Collateral, Borrower or Successor Borrower (as applicable) shall open at any Eligible Institution an Eligible Account (the “Successor ObligorDefeasance Collateral Account”). The Defeasance Collateral Account shall contain only (i) Total Defeasance Collateral, and (ii) cash from interest and principal paid on the Total Defeasance Collateral. All cash from interest and principal payments paid on the Total Defeasance Collateral shall be paid over to Lender on each Monthly Payment Date and applied first to accrued and unpaid interest and then to principal. Any cash from interest and principal paid on the Total Defeasance Collateral not needed to pay the Scheduled Defeasance Payments shall be paid to Borrower or Successor Borrower (as applicable). Borrower or Successor Borrower (as applicable) shall cause the Eligible Institution at which the Total Defeasance Collateral is deposited to enter into an agreement with Borrower or Successor Borrower (as applicable) and Lender, satisfactory to Lender in its reasonable discretion, pursuant to which such Eligible Institution shall agree to hold and distribute the Total Defeasance Collateral in accordance with this Agreement. Borrower or Successor Borrower (as applicable) shall be the owner of the Defeasance Collateral Account and shall report all income accrued on Total Defeasance Collateral for federal, state and local income tax purposes in its income tax return (or in a consolidated, unitary or similar tax return of Borrower’s obligations under a group in which Borrower or Successor Borrower (as applicable) is a member, to the Full Defeased Note extent required and/or permitted by Applicable Law, or, if Borrower or Defeased Note, Successor Borrower (as the case may beapplicable) is a disregarded entity for such tax purposes, the other Loan Documents applicable tax return of the regarded owner of Borrower or Successor Borrower (as applicable)). Borrower shall prepay all cost and expenses associated with opening and maintaining the Defeasance Collateral Account. Lender shall not in any way be liable by reason of any insufficiency in the Defeasance Collateral Account.
(e) In connection with a Total Defeasance Event under this Section 2.8, Borrower shall transfer and assign all obligations, rights and duties under and to the Note and the Security Agreement, together with the pledged Total Defeasance CollateralCollateral to a newly-created successor entity, which entity shall be a Single Purpose Entity and which entity shall be designated or established by Borrower and approved by Lender in its reasonable discretion (the “Successor Borrower”). The Such Successor Obligor Borrower shall assume, in a writing or writings satisfying assume the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, and Borrower shall, except as set forth herein, shall be relieved of its obligations hereunder. If under the Loan Documents (other than those obligations which by their terms survive a Successor Borrower assumes Borrower’s obligationsrepayment, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s defeasance or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and other satisfaction of the Loan Documents and/or a transfer of the Property in connection with Lender’s exercise of its remedies under the Loan Documents). Borrower shall pay a minimum of $1,000 to any such Successor Borrower as consideration for assuming the obligation of Successor Borrowerobligations under the Note and the Security Agreement. Borrower shall pay all reasonable out-of-pocket costs and expenses incurred by LenderLender in connection therewith, including including, without limitation, Lender’s reasonable out-of-pocket attorney’s fees and expenses.
(f) Notwithstanding anything to the contrary contained in this Section 2.8, incurred the parties hereto hereby acknowledge and agree that after the Securitization of the Loan (or any portion thereof or interest therein), with respect to any Lender approval or similar discretionary rights over any matters contained in this Section (any such matter, a “Defeasance Approval Item”), such rights shall be construed such that Lender shall only be permitted to withhold its consent or approval with respect to any Defeasance Approval Item if the same fails to meet the Prudent Lender Standard.
(g) For the avoidance of doubt, in no event shall Borrower be permitted to effectuate a defeasance in connection with Successor Borrower’s assumption the release of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability an Individual Property or obligation relating to any environmental matters arising under Section 5.1(F)group of Individual Properties.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance When the principal or Partial Defeasance redemption price (as the case may be) of, and interest on all Bonds issued hereunder have been paid, including without limitation the purchase price for Bonds tendered under Section 2.2 hereof, or provision has been made for payment of the Loan same, together with the compensation of the Trustee and all other sums payable hereunder by Borrower the Issuer, the right, title and interest of the Trustee and the Credit Facility Trustee in and to the Trust Estate and the security interests shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurthereupon cease, and (ii) in the event Trustee and the Credit Facility Trustee, on written demand of a Partial Defeasancethe Issuer, shall release this Indenture and the Individual Property proposed security interests and shall execute such documents to evidence such release as may be defeasedreasonably required by the Issuer and shall turn over to the Company or to such person, body or authority as may be entitled to receive the same all balances then held by the Trustee or the Credit Facility Trustee hereunder; provided, that, Borrower shall be required to defease if any payments have been received by the Loan on Trustee or the Defeasance Release Date specified in such notice unless such notice is revoked in writing Credit Facility Trustee derived from draws by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender Credit Facility Trustee under the Credit Facility in connection with Borrower’s giving such release, such balances shall be paid to the Credit Facility Issuer to the extent of such notice payments. If payment or provision therefor is made with respect to less than all of the Bonds, the particular Bonds (or portion thereof) for which provision for payment shall have been considered made shall be selected by lot by the Trustee and revocation,thereupon the Trustee shall take similar action for the release of this Indenture with respect to such Bonds. Notwithstanding anything to the contrary contained herein, Bonds purchased at the option of the owners thereof with moneys held by the Trustee pursuant to this Article XIV shall not be remarketed but shall be canceled by the Trustee.
(b) Provision for the payment of Bonds shall be deemed to have been made when the Trustee holds in the Bond Fund, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment provided that if a Credit Facility is then held by the Trustee or the Credit Facility Trustee, such moneys shall constitute Available Moneys or (2) noncallable Governmental Obligations maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys without reinvestment to make such payment, and provided, that if a Credit Facility is then held by the Credit Facility Trustee, such Governmental Obligations shall have been on deposit with the Trustee in a separate and segregated account for a period of three hundred sixty-six (366) days during and prior to which no Event of Bankruptcy has occurred or which Governmental Obligations were purchased with Available Moneys.
(c) Borrower No Bonds in respect of which a deposit under subsection (b) above has been made shall be deemed paid within the meaning of this Article unless the Trustee is satisfied that the amounts deposited are sufficient to make all payments that might become due on the Bonds, including purchase price payments for Bonds tendered at the option of the owners or purchased by the Company in lieu of redemption, if any. Notwithstanding the foregoing, no delivery to the Trustee under this subsection (c) shall be deemed a payment of any Bonds which are to be redeemed prior to their stated maturity until such Bonds shall have paid been irrevocably called or designated for redemption on a date thereafter on which such Bonds may be redeemed in accordance with the provisions of this Indenture or the Issuer shall have given the Trustee, in form satisfactory to Lender all the Trustee, irrevocable instructions to give notice of redemption. Neither the obligations nor moneys deposited with the Trustee pursuant to this Section shall be withdrawn or used for any purpose other than, and shall be segregated and held in trust for, the payment of the principal of, redemption price of, purchase price if applicable of, and interest accrued and unpaid on the Principal Indebtedness Bonds with respect to which such deposit has been made. In the event that such moneys or obligations are to be applied to the payment of principal or redemption price of any Bonds more than sixty (60) days following the deposit thereof with the Trustee, the Trustee shall mail a notice stating that such moneys or obligations have been deposited and including identifying the Defeasance Release Date,Bonds for the payment of which such moneys or obligations are being held to all owners of such Bonds at their addresses shown on the Bond Register.
(d) Borrower shall pay Anything in Article XIV to Lender all reasonable out-of-pocket fees and expenses associated the contrary notwithstanding, if moneys or Governmental Obligations have been deposited or set aside with the Full Defeasance Trustee pursuant to this Article for the payment of the principal or Partial Defeasanceredemption price, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (including purchase price if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, of the Bonds and all other sums then due the interest thereon and payable under such moneys or Governmental Obligations do not constitute Available Moneys, no amendment to the Loan Documents,provisions of this Article shall be made without the consent of the owner of each of the Bonds affected thereby.
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with Notwithstanding the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal those provisions relating to the then outstanding principal balance purchase of Bonds upon the demand of any Bondholders, the maturity of Bonds, interest payments and dates thereof, and the dates, premiums and notice requirements for optional and mandatory redemption or purchase and the Trustee's remedies with respect thereto, and provisions relating to exchange, transfer and registration of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, the holding of moneys in trust and repayments to the Company or the Credit Facility Issuer from the Bond Fund and the duties of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed Trustee in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements foregoing and the fees, expenses and indemnities of this Section 2.10,
(h) In the case of a Partial DefeasanceTrustee and the Credit Facility Trustee, shall remain in effect and shall be binding upon the Trustee, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial DefeasanceCredit Facility Trustee, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10Issuer, the Individual Property which is Company and the subject Bondholders notwithstanding the release and discharge of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Indenture.
Appears in 1 contract
Samples: Trust Indenture (Laralev Inc)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Release Date to voluntarily defease the Start-Up Day entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Mortgage by providing Lender with the Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(ai) Any Full Borrower shall provide Lender not less than thirty (30) days prior written notice (or such shorter period of time if permitted by Lender in its reasonable discretion) specifying a date (the “Defeasance Date”) on which the Defeasance Event is to occur;
(ii) Borrower shall pay to Lender (A) all payments of principal and interest due on the Loan to and including the Defeasance Date (including, without limitation, interest accrued but not paid or Partial payable through and including the Defeasance Date, if any) and (B) all other sums, then due under the Note, this Agreement, the Mortgage and the other Loan Documents;
(iii) Borrower shall deposit the Defeasance Collateral into the Defeasance Collateral Account and otherwise comply with the provisions of Section 2.5.3 and 2.5.4 hereof;
(iv) Borrower shall execute and deliver to Lender a Security Agreement in respect of the Loan by Defeasance Collateral Account and the Defeasance Collateral;
(v) Borrower shall be made on deliver to Lender an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (A) Lender has a Payment Date,legal and valid perfected first priority security interest in the Defeasance Collateral Account and the Defeasance Collateral, (B) if a Securitization has occurred, the REMIC Trust formed pursuant to such Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of a Defeasance Event pursuant to this Section 2.5.1, and (C) if required by the Rating Agencies, a non consolidation opinion with respect to the Successor Borrower;
(vi) Borrower shall deliver to Lender a Rating Agency Confirmation as to the Defeasance Event;
(vii) Borrower shall deliver an Officer’s Certificate certifying that the requirements set forth in this Section 2.5.1 and in Section 2.5.3 and 2.5.4 have been satisfied;
(viii) Borrower shall deliver a certificate of Gxxxx Xxxxxxxx or a “big four” or other nationally recognized public accounting firm reasonably acceptable to Lender certifying that the Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all third-party, out-of-pocket costs and expenses of Lender actually incurred in connection with the Defeasance Event, including Lender’s reasonable attorneys’ fees and expenses and Rating Agency fees and expenses.
(b) If Borrower has elected to defease the Note and the requirements of this Section 2.5 have been satisfied, the Property shall be released from the lien of the Mortgage and the other Loan Documents and the Defeasance Collateral pledged pursuant to the Security Agreement shall be the sole source of collateral securing the Note. In connection with the release of the Lien, Borrower shall provide submit to Lender, not less than fifteen (15) days prior written notice to the Defeasance Date (or such shorter time as is acceptable to Lender specifying in its reasonable discretion), a release of Lien (and related Loan Documents) for execution by Lender. Such release shall be in a form appropriate in the jurisdiction in which the Property is located. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurin compliance with all Legal Requirements, and (ii) will effect such release in accordance with the event terms of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) this Agreement. Borrower shall pay to Lender all reasonable out-of-pocket fees costs, taxes and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an OfficerMortgage, including Lender’s Certificate of Borrower certifying that the requirements reasonable attorneys’ fees actually incurred. Except as set forth in this Section 2.10 have been satisfied including2.5 or Section 11.33 hereof, without limitationno repayment, that no Event prepayment or defeasance of Default has occurred and is continuing,
(iv) an opinion all or any portion of counsel in form and substance satisfying the Prudent Lender Standard statingNote shall cause, among other thingsgive rise to a right to require, (A) thator otherwise result in, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and release of the Lien of the Mortgage on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Property.
Appears in 1 contract
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 44 shall apply in the event the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 44(a) and (c) below, Borrower shall have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the lien of this Instrument upon the satisfaction of the following conditions:
(a) Borrower shall not be permitted have the right to obtain Defeasance at any time to defease all or any portion of the following times:
(i) if the Loan is not assigned to a REMIC trust;
(ii) during the Lockout Period (as defined in the Note);
(iii) after the expiration of the Defeasance Period (as defined in the Note); or
(iv) after Lxxxxx has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 6 of the Note.
(b) Borrower shall give Lender Notice (the “Defeasance Notice”) specifying a Business Day (the “Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Lxxxxx will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.
(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (the “Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate.
(i) If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations hereunder, Lxxxxx shall have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as expressly provided in Section 44(d)(ii), Borrower shall be released from all further obligations under this Section 2.1044. Provided Borrower acknowledges that no Lxxxxx will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the lien of this Instrument in reliance on the executed Defeasance Notice. Bxxxxxxx agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Instrument, of the damages Lender will incur by reason of Bxxxxxxx’s default.
(ii) In the event that the Defeasance is not consummated on the Defeasance Closing Date for any reason, Bxxxxxxx agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 44(d)(i) above) incurred by Lxxxxx in reliance on the executed Defeasance Notice, within 5 Business Days after Bxxxxxxx receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lxxxxx’s third party costs and expenses.
(iii) All payments required to be made by Borrower to Lender pursuant to this Section 44 shall be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.
(e) No Event of Default has occurred and is continuing.
(f) The documents required to be delivered to Lender on or prior to the Defeasance Closing Date are:
(i) an opinion of counsel for Bxxxxxxx, after in form and substance satisfactory to Lender, to the date which effect that Lender has a valid and perfected lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof;
(ii) an opinion of counsel for Bxxxxxxx, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is two duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms;
(iii) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms;
(iv) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created;
(v) if Borrower designates the Successor Borrower, an opinion of counsel for Successor Bxxxxxxx, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court;
(vi) unless waived by Lxxxxx, an opinion of counsel for Bxxxxxxx, in form and substance satisfactory to Lender, to the effect that:
(A) if, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) years after the Start-Up Day qualification and status of the last Note securitized, Borrower may voluntarily defease all REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Loan Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance, and
(B) the Defeasance will not result in a “Full Defeasancesale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder;
(vii) if any certificates evidencing the Securitization remain outstanding, a Rating Confirmation;
(viii) unless waived by Lxxxxx, a written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date;
(ix) Lender’s form of a pledge and security agreement (“Pledge Agreement”) or and financing statements which pledge and create a portion first priority security interest in the Defeasance Collateral in favor of the Loan Lxxxxx;
(x) Lender’s form of a transfer and assumption agreement (“Partial DefeasanceTransfer and Assumption Agreement”), whereupon Borrower and any guarantor (in either each case, subject to the satisfaction of the following conditions precedent:
(aall requirements hereunder) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred relieved from liability in connection with the delivery Loan (other than any liability under Section 18 of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal this Instrument for events that occur prior to the Defeasance DepositClosing Date, or, at Lender’s request, deliver to Lender whether discovered before or after the Defeasance Collateral. In connection with the foregoing, Closing Date) and Successor Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,shall assume all remaining obligations;
(fxi) Borrower shall execute and deliver to Lender Forms of all documents reasonably required necessary to release the Mortgaged Property from the liens created by Lender this Instrument and related UCC financing statements (i) in the case of a Full Defeasancecollectively, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased NoteRelease Instruments”), and each in appropriate form required by the state in which the Property is located; and
(iixii) in the case of a Partial Defeasancesuch other opinions, to issue two substitute notes certificates, documents or instruments as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note Lender may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,reasonably request;
(g) Borrower shall deliver to Lender on or prior to the following itemsDefeasance Closing Date:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the The Defeasance Collateral (the “Security Agreement”),which meets all requirements of Section 44(g)(ii) below and is owned by Bxxxxxxx, free and clear of all liens and claims of third-parties;
(ii) The Defeasance Collateral must be in an amount to provide for execution by Lender(A) redemption payments to occur prior, a release but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date and (B) deliver redemption proceeds at least equal to the amount of principal and interest due on the Note on each applicable Individual Property being defeased Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”). The Defeasance Collateral shall be arranged such that redemption payments received from the lien Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments. Unless otherwise agreed in writing by Lxxxxx, the pledge of the Defeasance Collateral shall be effectuated through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,laws; and
(iii) an Officer’s Certificate of Borrower certifying that All accrued and unpaid interest and all other sums due under the requirements set forth in Note, this Section 2.10 have been satisfied Instrument and under the other Loan Documents, including, without limitation, that no Event of Default has occurred and is continuing,all amounts due under Section 44(i) below, up to the Defeasance Closing Date shall be paid in full on or prior to the Defeasance Closing Date.
(ivh) If Lender permits Borrower to designate the Successor Borrower, then Borrower shall, at Borrower’s expense, designate or establish an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, accommodation borrower (A“Successor Borrower”) that, the Defeasance Collateral has been duly and validly assigned and delivered satisfactory to Lender and Lender has (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a first priority perfected security interest in and Lien on “Single Purpose Entity” to assume at the time of Defeasance Deposit and a first priority perfected security interest in and Lien on ownership of the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan liability for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as Pledge Agreement and the case may be, the other Loan Documents and (to the Security Agreement, together with the pledged Defeasance Collateralextent that liability thereunder survives release of this Instrument). The Borrower shall pay to Successor Obligor shall assume, in Borrower a writing or writings satisfying the Prudent Lender Standard, all fee of $1,000.00 as consideration of Successor Bxxxxxxx’s assumption of Borrower’s obligations under the Full Defeased Note or the Defeased NoteLoan Documents. Notwithstanding any contrary provision hereunder, as the case may be, the other Loan Documents and the Security Agreement and, no Transfer fee is payable to Lender upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and Transfer of the Loan Documents as the obligation of Successor Borrower. in accordance with this Section.
(i) Borrower shall pay all out-of-pocket reasonable costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred Lender in connection with Successor the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include, without limitation, all fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including, without limitation, reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described herein and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance); the cost incurred by Lender to obtain a Rating Confirmation contemplated hereunder; reasonable Attorneys’ Fees and Costs; and a processing fee to cover Lxxxxx’s administrative costs to process Borrower’s assumption of Defeasance request. Lender reserves the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release right to require that Borrower from any liability or obligation relating post a deposit to any environmental matters arising under Section 5.1(F)cover costs which Lender reasonably anticipates will be incurred.
Appears in 1 contract
Samples: Multifamily Deed of Trust, Assignment of Rents and Security Agreement (NTS Realty Holdings Lp)
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 44 shall apply in the event the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 44(a) and (c) below, Borrower shall have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the lien of this Instrument upon the satisfaction of the following conditions:
(a) Borrower shall not be permitted have the right to obtain Defeasance at any time to defease all or any portion of the following times:
(i) if the Loan is not assigned to a REMIC trust;
(ii) during the Lockout Period (as defined in the Note);
(iii) after the expiration of the Defeasance Period (as defined in the Note); or
(iv) after Xxxxxx has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 6 of the Note.
(b) Borrower shall give Lender Notice (the “Defeasance Notice”) specifying a Business Day (the “Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Xxxxxx will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.
(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (the “Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate.
(i) If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations hereunder, Xxxxxx shall have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as expressly provided in Section 44(d)(ii), Borrower shall be released from all further obligations under this Section 2.1044. Provided Borrower acknowledges that no Xxxxxx will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the lien of this Instrument in reliance on the executed Defeasance Notice. Xxxxxxxx agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Instrument, of the damages Lender will incur by reason of Xxxxxxxx’s default.
(ii) In the event that the Defeasance is not consummated on the Defeasance Closing Date for any reason, Xxxxxxxx agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 44(d)(i) above) incurred by Xxxxxx in reliance on the executed Defeasance Notice, within 5 Business Days after Xxxxxxxx receives a written demand for payment, accompanied by a statement, in reasonable detail, of Xxxxxx’s third party costs and expenses.
(iii) All payments required to be made by Borrower to Lender pursuant to this Section 44 shall be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.
(e) No Event of Default has occurred and is continuing.
(f) The documents required to be delivered to Lender on or prior to the Defeasance Closing Date are:
(i) an opinion of counsel for Xxxxxxxx, after in form and substance satisfactory to Lender, to the date which effect that Lender has a valid and perfected lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof;
(ii) an opinion of counsel for Xxxxxxxx, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is two duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms;
(iii) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms;
(iv) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created;
(v) if Borrower designates the Successor Borrower, an opinion of counsel for Successor Xxxxxxxx, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court;
(vi) unless waived by Xxxxxx, an opinion of counsel for Xxxxxxxx, in form and substance satisfactory to Lender, to the effect that:
(A) if, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) years after the Start-Up Day qualification and status of the last Note securitized, Borrower may voluntarily defease all REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Loan Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance, and
(B) the Defeasance will not result in a “Full Defeasancesale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder;
(vii) if any certificates evidencing the Securitization remain outstanding, a Rating Confirmation;
(viii) unless waived by Xxxxxx, a written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date;
(ix) Lender’s form of a pledge and security agreement (“Pledge Agreement”) or and financing statements which pledge and create a portion first priority security interest in the Defeasance Collateral in favor of the Loan Xxxxxx;
(x) Lender’s form of a transfer and assumption agreement (“Partial DefeasanceTransfer and Assumption Agreement”), whereupon Borrower and any guarantor (in either each case, subject to the satisfaction of the following conditions precedent:
(aall requirements hereunder) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred relieved from liability in connection with the delivery Loan (other than any liability under Section 18 of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal this Instrument for events that occur prior to the Defeasance DepositClosing Date, or, at Lender’s request, deliver to Lender whether discovered before or after the Defeasance Collateral. In connection with the foregoing, Closing Date) and Successor Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,shall assume all remaining obligations;
(fxi) Borrower shall execute and deliver to Lender Forms of all documents reasonably required necessary to release the Mortgaged Property from the liens created by Lender this Instrument and related UCC financing statements (i) in the case of a Full Defeasancecollectively, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased NoteRelease Instruments”), and each in appropriate form required by the state in which the Property is located; and
(iixii) in the case of a Partial Defeasancesuch other opinions, to issue two substitute notes certificates, documents or instruments as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note Lender may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,reasonably request;
(g) Borrower shall deliver to Lender on or prior to the following itemsDefeasance Closing Date:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the The Defeasance Collateral (the “Security Agreement”),which meets all requirements of Section 44(g)(ii) below and is owned by Xxxxxxxx, free and clear of all liens and claims of third-parties;
(ii) The Defeasance Collateral must be in an amount to provide for execution by Lender(A) redemption payments to occur prior, a release but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date and (B) deliver redemption proceeds at least equal to the amount of principal and interest due on the Note on each applicable Individual Property being defeased Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”). The Defeasance Collateral shall be arranged such that redemption payments received from the lien Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments. Unless otherwise agreed in writing by Xxxxxx, the pledge of the Defeasance Collateral shall be effectuated through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,laws; and
(iii) an Officer’s Certificate of Borrower certifying that All accrued and unpaid interest and all other sums due under the requirements set forth in Note, this Section 2.10 have been satisfied Instrument and under the other Loan Documents, including, without limitation, that no Event of Default has occurred and is continuing,all amounts due under Section 44(i) below, up to the Defeasance Closing Date shall be paid in full on or prior to the Defeasance Closing Date.
(ivh) If Lender permits Borrower to designate the Successor Borrower, then Borrower shall, at Borrower’s expense, designate or establish an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, accommodation borrower (A“Successor Borrower”) that, the Defeasance Collateral has been duly and validly assigned and delivered satisfactory to Lender and Lender has (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a first priority perfected security interest in and Lien on “Single Purpose Entity” to assume at the time of Defeasance Deposit and a first priority perfected security interest in and Lien on ownership of the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan liability for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as Pledge Agreement and the case may be, the other Loan Documents and (to the Security Agreement, together with the pledged Defeasance Collateralextent that liability thereunder survives release of this Instrument). The Borrower shall pay to Successor Obligor shall assume, in Borrower a writing or writings satisfying the Prudent Lender Standard, all fee of Borrower$1,000.00 as consideration of Successor Xxxxxxxx’s assumption of Xxxxxxxx’s obligations under the Full Defeased Note or the Defeased NoteLoan Documents. Notwithstanding any contrary provision hereunder, as the case may be, the other Loan Documents and the Security Agreement and, no Transfer fee is payable to Lender upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and Transfer of the Loan Documents as the obligation of Successor Borrower. in accordance with this Section.
(i) Borrower shall pay all out-of-pocket reasonable costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred Lender in connection with Successor the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include, without limitation, all fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including, without limitation, reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described herein and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance); the cost incurred by Lender to obtain a Rating Confirmation contemplated hereunder; reasonable Attorneys’ Fees and Costs; and a processing fee to cover Xxxxxx’s administrative costs to process Borrower’s assumption of Defeasance request. Lender reserves the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release right to require that Borrower from any liability or obligation relating post a deposit to any environmental matters arising under Section 5.1(F)cover costs which Lender reasonably anticipates will be incurred.
Appears in 1 contract
Samples: Multifamily Deed of Trust, Assignment of Rents and Security Agreement (NTS Realty Holdings Lp)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after On the date which is two (2) years after during the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of Amortization Period that the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying have been satisfied: (i) a Payment Date an amount shall have been deposited (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (iix) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount Funding Account equal to the Defeasance Depositsum of the Class A Outstanding Principal Amount, orthe Class B Outstanding Principal Amount and the CTO Outstanding Principal Amount, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
which amount shall be invested in Cash Equivalents and (f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (iy) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be Reserve Account equal to or greater than the excess of the sum of the Class A Monthly Interest, the Class B Monthly Interest and the estimated CTO Monthly Interest over the estimated amount of investment earnings on amounts in the Defeasance Funding Account, as estimated by the Transferor, for each of the Interest Accrual Periods during the period from the date of the deposit to the Defeasance Funding Account through the CTO Expected Final Payment Date (i) 1.51:1.00, and the "Required Defeasance Reserve Account Amount"); (ii) the Debt Service Coverage Ratio with respect Transferor shall have delivered to the Loan for Trustee an Opinion of Counsel to the trailing twelve effect that such deposit and termination of obligations will not result in the Trust being required to register as an "investment company" within the meaning of the Investment Company Act and an Opinion of Counsel to the effect that following such deposit none of the Trust, the Defeasance Reserve Account or the Defeasance Funding Account will be deemed to be an association (12or publicly traded partnership) months immediately prior taxable as a corporation; (iii) the Transferor shall have delivered to the Trustee a certificate of an officer of the Transferor stating that the Transferor reasonably believes that such Partial Defeasancedeposit and termination of its obligations will not constitute a Pay Out Event or any event that, with the giving of notice or the lapse of time, would cause a Pay Out Event to occur; and (iv) the Rating Agency Condition shall have been satisfied; then, the Series 1998-2 Securities will no longer be entitled to the security interest of the Trust in the Receivables and
, except those set forth in clause (i) In the case of a Partial above, other Trust assets ("Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion"), the assignment percentages applicable to the allocation to the Series 1998-1 Securityholders of Principal Collections, Finance Charge Collections, unpaid Adjustment Payments and assumption Default Amounts shall be reduced to zero and the Monthly Servicing Fee shall be reduced to zero; provided, however, that no such Defeasance shall occur for so long as any Class A Charge-Offs, Class B Charge-Offs or CTO Charge-Offs exist. Upon the satisfaction of the Loanforegoing conditions, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower Class D Invested Amount shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating be reduced to any environmental matters arising under Section 5.1(F)zero.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Federated Department Stores Inc /De/)
Defeasance. Borrower shall not be permitted Notwithstanding any provision of this Mortgage to the contrary, at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which (A) is two (2) years after the Start-Up Day “startup day,” within the meaning of Section 860G(a)(9) of the last Note securitizedInternal Revenue Code of 1986, Borrower may voluntarily defease all of as amended from time to time or any successor statute (the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceCode”), in either caseof a “real estate mortgage investment conduit,” (“REMIC”) within the meaning of Section 860D of the Code, subject to that holds the Note and this Mortgage or (B) three (3) years after the date hereof, whichever shall earlier occur, and provided no Event of Default has occurred, Mortgagor may cause the release of the Property from the lien of this Mortgage and the other Loan Documents upon the satisfaction of the following conditions precedentconditions:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide A. not less than fifteen thirty (1530) days prior written notice shall be given to Lender Mortgagee specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance Collateral is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,delivered;
(c) Borrower shall have paid to Lender B. all principal and interest accrued and unpaid on interest and all other sums then due under this Mortgage, the Principal Indebtedness Note and under the other Loan Documents up to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender , including, without limitation, all reasonable out-of-pocket fees costs and expenses associated reasonably incurred by Mortgagee or its agents in connection with the Full Defeasance or Partial Defeasance, as applicable such release (including, without limitation, fees the review of Rating Agencies the proposed Defeasance Collateral and accountants, the preparation of the Defeasance Security Agreement (as hereinafter defined) and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicabledocumentation), reasonable fees and out-of-pocket costs of any loan servicer (if any) shall be paid in connection with the Full Defeasance full on or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal prior to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,Release Date; and
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower C. Mortgagor shall deliver to Lender Mortgagee on or prior to the following itemsRelease Date:
(i) a pledge and security agreement, in form and substance satisfying the Prudent Lender Standardreasonably satisfactory to Mortgagee in its sole but reasonable discretion, creating a first priority perfected Lien on the Defeasance Deposit and security interest in favor of Mortgagee in the Defeasance Collateral (the “Defeasance Security Agreement”),, which shall provide, among other things, that any payments generated by the Defeasance Collateral shall be paid directly to Mortgagee and applied by Mortgagee in satisfaction of all amounts then due and payable hereunder and any excess received by Mortgagee from the Defeasance Collateral over the amounts payable by Mortgagor hereunder or under the Note shall be refunded to Mortgagor promptly after each Payment Date;
(ii) for execution by Lendereither (x) direct, a release non-callable obligations of the United States of America or (y) non-callable obligations, other than U.S. Treasury Obligations, that are “government securities” within the meaning of Section 1.860G-2(a)(8) of the Treasury Regulations, as amended, or Section 2(a)(16) of the Investment Act of 1940, that are acceptable to each applicable Individual Property rating agency, in each case, and that provide for payments prior, but as close as possible, to all successive Payment Dates occurring after the Release Date through and including the Maturity Date, with each such payment being defeased from equal to or greater than the lien amount of the corresponding installment of principal and interest required to be paid under the Note (provided that for all purposes of this Section 12.5(C)(2), all principal, accrued interest and other amounts payable under this Mortgage, the Note and the other Loan Documents shall be due and payable in full on the Maturity Date) (the “Defeasance Collateral”), each of which shall be duly endorsed by the holder thereof as directed by Mortgagee or accompanied by a written instrument of transfer in form and substance reasonably satisfactory to Mortgagee in its sole but reasonable discretion (including, without limitation, such instruments as may be required by the depository institution holding such securities or the issuer thereof, as the case may be, to effectuate book-entry transfers and pledges through the book-entry facilities of such institution) in order to perfect upon the delivery of the Defeasance Security Agreement the first priority security interest in the Defeasance Collateral in favor of Mortgagee in conformity with all applicable Mortgage in a form appropriate for the jurisdiction in which state and federal laws governing granting of such Individual Property is located,security interests;
(iii) an Officer’s Certificate a certificate of Borrower Mortgagor certifying that all of the requirements set forth in this Section 2.10 12.5 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(iv) an opinion of counsel for Mortgagor in form and substance satisfying the Prudent Lender Standard and delivered by counsel reasonably satisfactory to Mortgagee in its sole but reasonable discretion stating, among other things, that (Ax) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender Mortgagee has a perfected first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and that the Proceeds thereof Defeasance Security Agreement is enforceable against Mortgagor in accordance with its terms and (By) that the subject Partial Defeasance any trust formed as a REMIC pursuant to a securitization will not adversely affect fail to maintain its status as a REMIC as a result of such defeasance
(v) a letter or other written evidence from any applicable rating agency that the status defeasance will not result in the withdrawal, downgrade or qualification of the ratings assigned to any REMIC formed certificates issued in connection with a Secondary Market Transactionsecuritization of the Property, if applicable;
(vi) a certificate in form and scope reasonably acceptable to Mortgagee in its sole discretion from a nationally recognized accounting firm or other independent certified public accountant satisfactory to Mortgagor that the Defeasance Collateral will generate amounts sufficient to make all payments of principal and interest due under the Note (including the scheduled payment of principal and interest due on the Maturity Date); and
(vvii) such other certificates, documents or instruments as Lender Mortgagee may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standardrequire. Upon compliance with the requirements of this Section 2.1012.5, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of this Mortgage and the applicable Mortgageother Loan Documents, and the Defeasance Collateral shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity constitute collateral which shall be a Special-Purpose Entity (secure the “Successor Obligor”), Note and all of Borrower’s other obligations under the Full Defeased Note or Defeased Loan Documents. Mortgagee will, at Mortgagor’s expense, execute and deliver any agreements reasonably requested by Mortgagor to release the lien of this Mortgage from the Property. Upon the release of the Property in accordance with this Section 12.5, Mortgagor shall assign all its obligations and rights under the Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral, to a successor entity approved by Mortgagee in its reasonable discretion (the “Successor Mortgagor”), which approval shall not be unreasonably withheld, conditioned or delayed. Mortgagee shall have the right to establish or designate the Successor Mortgagor and to purchase, or cause to be purchased, the Defeasance Collateral (the “Defeasance Rights and Obligations”), which rights may be exercised in Mortgagee’s sole discretion and shall be retained by the Mortgagee named herein notwithstanding the transfer or securitization of the Loan. The Successor Obligor Mortgagor shall assume, execute an assumption agreement in a writing or writings satisfying the Prudent Lender Standard, all of Borrowerform and substance reasonably satisfactory to Mortgagee in its sole discretion pursuant to which it shall assume Mortgagor’s obligations under the Full Defeased Note or and the Defeased Defeasance Security Agreement. As conditions to such assignment and assumption, Mortgagor shall (x) deliver to Mortgagee an opinion of counsel in form and substance and delivered by counsel reasonably satisfactory to Mortgagee in its sole discretion stating, among other things, that such assumption agreement is enforceable against Mortgagor and the Successor Mortgagor in accordance with its terms and that the Note, as the case may be, Defeasance Security Agreement and the other Loan Documents Documents, as so assumed, are enforceable against such successor entity in accordance with their respective terms, and (y) pay all costs and expenses incurred by Mortgagee or its agents in connection with such assignment and assumption (including, without limitation, the review of the proposed transferee and the Security Agreement andpreparation of the assumption agreement and related documentation). Upon such assumption, upon such assignment, Borrower shall, except as set forth herein, Mortgagor shall be relieved of its obligations hereunder, under the other Loan Documents and under the Defeasance Security Agreement. If a Successor Borrower assumes Borrower’s obligationsIn addition, Lender may require as a condition to such defeasance, such additional legal opinions Indemnitor shall be fully released from Borrower’s and relieved of any personal liability under the Note or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority any of the Successor Borrower other Loan Documents for any acts or events occurring or obligations arising after the closing of such assumption which are not caused by or arising out of any acts or events occurring or obligations arising prior to or simultaneously with the closing of such assumption. Mortgagee has entered into an agreement with Defeasance Holding Company, LLC (including a non-consolidation opinion), “CDHC”) pursuant to which Mortgagee has assigned to CDHC the assignment Defeasance Rights and assumption Obligations. Mortgagor hereby acknowledges the transfer to CDHC of the Loan, the Security Agreement Defeasance Rights and the Defeasance Collateral between Borrower Obligations and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower releases Mortgagee from any liability for actions or obligation relating inactions of CDHC related to any environmental matters arising under Section 5.1(F)the Defeasance Rights and Obligations.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after On the date which is two (2) years after during the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of Amortization Period that the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying have been satisfied: (i) a Payment Date an amount shall have been deposited (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (iix) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount Funding Account equal to the Defeasance Depositsum of the Class A Outstanding Principal Amount, orthe Class B Outstanding Principal Amount and the CTO Outstanding Principal Amount, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
which amount shall be invested in Cash Equivalents and (f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (iy) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be Reserve Account equal to or greater than the excess of the sum of the Class A Monthly Interest, the Class B Monthly Interest and the estimated CTO Monthly Interest over the estimated amount of investment earnings on amounts in the Defeasance Funding Account, as estimated by the Transferor, for each of the Interest Accrual Periods during the period from the date of the deposit to the Defeasance Funding Account through the CTO Expected Final Payment Date (i) 1.51:1.00, and the "Required Defeasance Reserve Account Amount"); (ii) the Debt Service Coverage Ratio with respect Transferor shall have delivered to the Loan for Trustee an Opinion of Counsel to the trailing twelve effect that such deposit and termination of obligations will not result in the Trust being required to register as an "investment company" within the meaning of the Investment Company Act and an Opinion of Counsel to the effect that following such deposit none of the Trust, the Defeasance Reserve Account or the Defeasance Funding Account will be deemed to be an association (12or publicly traded partnership) months immediately prior taxable as a corporation; (iii) the Transferor shall have delivered to the Trustee a certificate of an officer of the Transferor stating that the Transferor reasonably believes that such Partial Defeasancedeposit and termination of its obligations will not constitute a Pay Out Event or any event that, with the giving of notice or the lapse of time, would cause a Pay Out Event to occur; and (iv) the Rating Agency Condition shall have been satisfied; then, the Series 1998-2 Securities will no longer be entitled to the security interest of the Trust in the Receivables and
, except those set forth in clause (i) In the case of a Partial above, other Trust assets ("Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion"), the assignment percentages applicable to the allocation to the Series 1998-2 Securityholders of Principal Collections, Finance Charge Collections, unpaid Adjustment Payments and assumption Default Amounts shall be reduced to zero and the Monthly Servicing Fee shall be reduced to zero; provided, however, that no such Defeasance shall occur for so long as any Class A Charge- Offs, Class B Charge-Offs or CTO Charge-Offs exist. Upon the satisfaction of the Loanforegoing conditions, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower Class D Invested Amount shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating be reduced to any environmental matters arising under Section 5.1(F)zero.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Fingerhut Receivables Inc)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance When the principal or Partial Defeasance redemption price (as the case may be) of, and interest on all Bonds issued hereunder have been paid, including without limitation the purchase price for Bonds tendered under Section 2.3 hereof, or provision has been made for payment of the Loan same, together with the compensation of the Trustee and all other sums payable hereunder by Borrower the Issuer, the right, title and interest of the Trustee and the Credit Facility Trustee in and to the Trust Estate and the security interests shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurthereupon cease, and (ii) in the event Trustee and the Credit Facility Trustee, on written demand of a Partial Defeasancethe Issuer, shall release this Indenture and the Individual Property proposed security interests and shall execute such documents to evidence such release as may be defeasedreasonably required by the Issuer and shall turn over to the Company or to such person, body or authority as may be entitled to receive the same all balances then held by the Trustee or the Credit Facility Trustee hereunder; provided, that, Borrower shall be required to defease if any payments have been received by the Loan on Trustee or the Defeasance Release Date specified in such notice unless such notice is revoked in writing Credit Facility Trustee derived from draws by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender Credit Facility Trustee under the Credit Facility in connection with Borrower’s giving such release, such balances shall be paid to the Credit Facility Issuer to the extent of such notice payments. If payment or provision therefor is made with respect to less than all of the Bonds, the particular Bonds (or portion thereof) for which provision for payment shall have been considered made shall be selected by lot by the Trustee and revocation,thereupon the Trustee shall take similar action for the release of this Indenture with respect to such Bonds. Notwithstanding anything to the contrary contained herein, Bonds purchased at the option of the owners thereof with moneys held by the Trustee pursuant to this Article 14 shall not be remarketed but shall be canceled by the Trustee.
(b) Provision for the payment of Bonds shall be deemed to have been made when the Trustee holds in the Bond Fund, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment provided that if a Credit Facility is then held by the Trustee or the Credit Facility Trustee, such moneys shall constitute Available Moneys or (2) noncallable Governmental Obligations maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys without reinvestment to make such payment; provided that the Trustee shall have received an opinion of Bond Counsel to the effect that such deposit will not affect the exclusion of the interest on any of the Bonds from the gross income of the recipients thereof for federal income tax purposes (e.g. by causing any of the Bonds to be classified as an "arbitrage bond" within the meaning of Section 148 of the Code); and provided further, that if a Credit Facility is then held by the Credit Facility Trustee, such Governmental Obligations shall have been on deposit with the Trustee in a separate and segregated account for a period of three hundred sixty-six (366) days during and prior to which no Event of Bankruptcy has occurred or which Governmental Obligations were purchased with Available Moneys; and provided further, that in the case of Bonds bearing a Variable Rate, the Trustee has received written evidence from each rating agency then rating such Bonds that the rating currently assigned to such Bonds will not be withdrawn or reduced as the result of a deposit under this subsection.
(c) Borrower No Bonds in respect of which a deposit under subsection (b) above has been made shall have be deemed paid to Lender all principal and interest accrued and unpaid on within the Principal Indebtedness to and including meaning of this Article unless the Defeasance Release Date,Trustee is satisfied that the
(d) Borrower shall pay Anything in Article 14 to Lender all reasonable out-of-pocket fees and expenses associated the contrary notwithstanding, if moneys or Governmental Obligations have been deposited or set aside with the Full Defeasance Trustee pursuant to this Article for the payment of the principal or Partial Defeasanceredemption price, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (including purchase price if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, of the Bonds and all other sums then due the interest thereon and payable under such moneys or Governmental Obligations do not constitute Available Moneys, no amendment to the Loan Documents,provisions of this Article shall be made without the consent of the owner of each of the Bonds affected thereby.
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with Notwithstanding the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal those provisions relating to the then outstanding principal balance purchase of Bonds upon the demand of any Bondholders, the maturity of Bonds, interest payments and dates thereof, and the dates, premiums and notice requirements for optional and mandatory redemption or purchase and the Trustee's remedies with respect thereto, and provisions relating to exchange, transfer and registration of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, the holding of moneys in trust and repayments to the Company or the Credit Facility Issuer from the Bond Fund and the duties of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed Trustee in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements foregoing and the fees, expenses and indemnities of this Section 2.10,
(h) In the case of a Partial DefeasanceTrustee and the Credit Facility Trustee, shall remain in effect and shall be binding upon the Trustee, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial DefeasanceCredit Facility Trustee, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10Issuer, the Individual Property which is Company and the subject Bondholders notwithstanding the release and discharge of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Indenture.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Prepayment Lockout Expiration Date and prior to the Start-Up Day Anticipated Repayment Date to obtain a release of the last Note securitized, Borrower may voluntarily defease all Lien of the Loan Mortgage encumbering the Collateral Property (a “Full "Defeasance”) or a portion of the Loan (a “Partial Defeasance”"), in either casefull only and not in part, subject to the upon satisfaction of the following conditions precedentconditions:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide not less than fifteen Lender thirty (1530) days prior written notice to Lender specifying (i) a Payment Date (the “"Defeasance Release Date”") on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal satisfied the conditions in this Section 2.4.1 and interest accrued and unpaid on which it shall effect the Principal Indebtedness to and including the Defeasance Release Date,Defeasance;
(dii) Borrower shall pay to Lender (A) all reasonable out-of-pocket fees accrued and expenses associated with unpaid interest on the Full Principal balance of the Note to and including the Defeasance or Partial Defeasance, as applicable Date and (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if anyB) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums sums, then due and payable under the Note, this Agreement, the Mortgage and the other Loan Documents,;
(eiii) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender Collateral into the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Sections 2.4.3 and 2.4.4 hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by a Security Agreement in respect of the Defeasance Collateral Account and the Defeasance Collateral;
(v) Borrower shall deliver to Lender
(1) an opinion of counsel for Borrower satisfactory to a prudent lender opining, among other things, that (A) Lender (i) has a legal and valid perfected first priority security interest in the case Defeasance Collateral Account and the Defeasance Collateral, (B) if a Secondary Market Transaction has occurred, the REMIC Trust formed pursuant to such Secondary Market Transaction will not fail to maintain its status as a "real estate mortgage investment conduit" within the meaning of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance Section 860D of the Loan (Code as a result of the “Full Defeased Note”)Defeasance pursuant to this Section 2.4.1, and (iiC) in delivery of the case Defeasance Collateral and the grant of a Partial Defeasance, security interest therein to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% Lender shall not constitute an avoidable preference under Section 547 of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); U.S. Bankruptcy Code or applicable state law, and (B2) the other promissory note having a principal balance equal an Insolvency Opinion with respect to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Successor Borrower;
(gvi) Borrower shall deliver to Lender a Rating Comfort Letter with respect to the following items:Defeasance;
(ivii) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) Borrower shall deliver an Officer’s 's Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.4.1
(a) have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivviii) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) Borrower shall deliver a certificate from an Independent of Borrower's independent certified public accountant certifying that the Defeasance Collateral complies will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all reasonable costs and expenses of Lender incurred in connection with all of the defeasance, including Lender's reasonable attorneys' fees and expenses and Rating Agency fees and expenses.
(b) If Borrower has elected to Defease the Note and the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.4.1 have been satisfied, the Debt Service Coverage Ratio with respect Collateral Property shall be released from the Lien of the Mortgage and the Defeasance Collateral, pledged pursuant to the Undefeased Note Security Agreement, shall be equal the sole source of collateral securing the Note. In connection with the release of the Lien, Borrower shall submit to or greater Lender, not less than thirty (30) days prior to the Defeasance Date, releases of Liens (and related Loan Documents) for execution by Lender. Such releases shall be in a form appropriate in the jurisdiction in which the Collateral Property is located and satisfactory to Lender in its reasonable discretion. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer's Certificate certifying that such documentation (i) 1.51:1.00is in compliance with all Legal Requirements, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to will effect such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined release in accordance with the Prudent Lender Standard. Upon compliance with the requirements terms of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs costs, taxes and expenses incurred by Lenderassociated with the release of the Lien of the Mortgage, including Lender’s 's reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateralattorneys' fees. Nothing Except as set forth in this Section 2.10 2.4.1, or otherwise in this Agreement, no repayment, prepayment or defeasance of all or any portion of the Note shall cause, give rise to a right to require, or otherwise result in, the release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)of the Lien of the Mortgage on the Collateral Property.
Appears in 1 contract
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 12.12 will apply if the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 12.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which the Defeasance Release Date specified Notice is received by Lender. Lender will acknowledge receipt of the Defeasance Notice and will state in such notice unless such notice is revoked in writing by receipt whether Lender will designate the Successor Borrower prior or will permit Borrower to designate the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Successor Borrower’s giving of such notice and revocation,.
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the The Defeasance Release Date,
Notice must be accompanied by a $10,000 non-refundable fee (d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full “Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased NoteFee”). The Defeased Note and If Lender does not receive the Undefeased Note shall have terms identical Defeasance Fee, then Borrower’s right to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents obtain Defeasance pursuant to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:that Defeasance Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 12.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)12.
Appears in 1 contract
Samples: Seniors Housing Loan and Security Agreement (Care Investment Trust Inc.)
Defeasance. Borrower shall not be permitted The Indenture will provide that the Company at any time may terminate all its obligations under the New Notes and the Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust and obligations to defease all register the transfer or any portion exchange of the Loan except as expressly provided New Notes, to replace mutilated, destroyed, lost or stolen New Notes and to maintain a registrar and paying agent in this Section 2.10respect of the New Notes. Provided The Company at any time may terminate its obligations under certain covenants that no are described in the Indenture, including the covenants described under “—Certain Covenants,” the operation of the cross-acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision described under “—Defaults” and the undertakings and covenants contained under “—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets” (“covenant defeasance”). If the Company exercises its legal or covenant defeasance option each Guarantor will be released from all of its obligations with respect to its Guarantee. The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, payment of the New Notes may not be accelerated because of an Event of Default has occurred and is continuingwith respect thereto. If the Company exercises its covenant defeasance option, after the date which is two (2) years after the Start-Up Day payment of the last Note securitized, Borrower New Notes may voluntarily defease all not be accelerated because of the Loan an Event of Default specified in clause (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”3), (4), (5), (6), (7) (with respect only to Significant Subsidiaries), (8) or (9) under “—Defaults.” In order to exercise either defeasance option, the Company must irrevocably deposit in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date trust (the “Defeasance Release Datedefeasance trust”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance Trustee money or Partial DefeasanceU.S. Government Obligations for the payment of principal, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer premium (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien interest on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered New Notes to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents redemption or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Notematurity, as the case may be, and must comply with certain other conditions, including delivery to the other Loan Documents Trustee of an Opinion of Counsel to the effect that holders of the New Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the Security Agreement, together with same amount and in the pledged Defeasance Collateral. The Successor Obligor shall assumesame manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a writing ruling of the Internal Revenue Service or writings satisfying change in applicable federal income tax law). Notwithstanding the Prudent Lender Standardforegoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of Borrower’s obligations the New Notes not theretofore deregistered (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Full Defeased Note or Trustee for the Defeased Notegiving of notice of redemption by the Trustee in the name, as and at the case may beexpense, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Company.
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Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 44 shall apply in the event the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 44(a) and (c) below, Borrower shall have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the lien of this Instrument upon the satisfaction of the following conditions:
(a) Borrower shall not be permitted have the right to obtain Defeasance at any time to defease all or any portion of the following times:
(i) if the Loan is not assigned to a REMIC trust;
(ii) during the Lockout Period (as defined in the Note);
(iii) after the expiration of the Defeasance Period (as defined in the Note); or
(iv) after Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 6 of the Note.
(b) Borrower shall give Lender Notice (the “Defeasance Notice”) specifying a Business Day (the “Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Lender will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.
(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (the “Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate. ‘
(i) If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations hereunder, Lender shall have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as expressly provided in Section 44(d)(ii), Borrower shall be released from all further obligations under this Section 2.1044. Provided Borrower acknowledges that no Lender will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the lien of this Instrument in reliance on the executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on·the date of this Instrument, of the damages Lender will incur by reason of Borrower’s default.
(ii) In the event that the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 44(d)(i) above) incurred by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.
(iii) All payments required to be made by Borrower to Lender pursuant to this Section 44 shall be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.
(e) No Event of Default has occurred and is continuing.
(f) The documents required to be delivered to Lender on or prior to the Defeasance Closing Date are:
(i) an opinion of counsel for Borrower, after in form and substance satisfactory to Lender, to the date which effect that Lender has a valid and perfected lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof;
(ii) an opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is two duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms;
(iii) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms;
(iv) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created;
(v) if Borrower designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court;
(vi) unless waived by Lender, an opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that:
(A) if, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) years after the Start-Up Day qualification and status of the last Note securitized, Borrower may voluntarily defease all REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Loan Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance, and
(B) the Defeasance will not result in a “Full Defeasancesale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder;
(vii) if any certificates evidencing the Securitization remain outstanding, a Rating Confirmation;
(viii) unless waived by Lender, a written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date;
(ix) Lender’s form of a pledge and security agreement (“Pledge Agreement”) or and financing statements which pledge and create a portion first priority security interest in the Defeasance Collateral in favor of the Loan Lender;
(x) Lender’s form of a transfer and assumption agreement (“Partial DefeasanceTransfer and Assumption Agreement”), whereupon Borrower and any guarantor (in either each case, subject to the satisfaction of the following conditions precedent:
(aall requirements hereunder) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred relieved from liability in connection with the delivery Loan (other than any liability under Section 18 of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal this Instrument for events that occur prior to the Defeasance DepositClosing Date, or, at Lender’s request, deliver to Lender whether discovered before or after the Defeasance Collateral. In connection with the foregoing, Closing Date) and Successor Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,shall assume all remaining obligations;
(fxi) Borrower shall execute and deliver to Lender Forms of all documents reasonably required necessary to release the Mortgaged Property from the liens created by Lender this Instrument and related UCC financing statements (i) in the case of a Full Defeasancecollectively, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased NoteRelease Instruments”), and each in appropriate form required by the state in which the Property is located; and
(iixii) in the case of a Partial Defeasancesuch other opinions, to issue two substitute notes certificates, documents or instruments as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note Lender may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,reasonably request;
(g) Borrower shall deliver to Lender on or prior to the following itemsDefeasance Closing Date:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the The Defeasance Collateral (the “Security Agreement”),which meets all requirements of Section 44(g)(ii) below and is owned by Borrower, free and clear of all liens and claims of third-parties;
(ii) The Defeasance Collateral must be in an amount to provide for execution (A) redemption payments to occur prior, but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date and (B) deliver redemption proceeds at least equal to the amount of principal and interest due on the Note on each Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”). The Defeasance Collateral shall be arranged such that redemption payments received from the Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments. Unless otherwise agreed in writing by Lender, a release of each applicable Individual Property being defeased from the lien pledge of the Defeasance Collateral shall be effectuated through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,laws; and
(iii) an Officer’s Certificate of Borrower certifying that All accrued and unpaid interest and all other sums due under the requirements set forth in Note, this Section 2.10 have been satisfied Instrument and under the other Loan Documents, including, without limitation, that no Event of Default has occurred and is continuing,all amounts due under Section 44(i) below, up to the Defeasance Closing Date shall be paid in full on or prior to the Defeasance Closing Date.
(ivh) If Lender permits Borrower to designate the Successor Borrower, then Borrower shall, at Borrower’s expense, designate or establish an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, accommodation borrower (A“Successor Borrower”) that, the Defeasance Collateral has been duly and validly assigned and delivered satisfactory to Lender and Lender has (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a first priority perfected security interest in and Lien on “Single Purpose Entity” to assume at the time of Defeasance Deposit and a first priority perfected security interest in and Lien on ownership of the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan liability for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as Pledge Agreement and the case may be, the other Loan Documents and (to the Security Agreement, together with the pledged Defeasance Collateralextent that liability thereunder survives release of this Instrument). The Borrower shall pay to Successor Obligor shall assume, in Borrower a writing or writings satisfying the Prudent Lender Standard, all fee of $1,000.00 as consideration of Successor Borrower’s assumption of Borrower’s obligations under the Full Defeased Note or the Defeased NoteLoan Documents. Notwithstanding any contrary provision hereunder, as the case may be, the other Loan Documents and the Security Agreement and, no Transfer fee is payable to Lender upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and Transfer of the Loan Documents as the obligation of Successor Borrower. in accordance with this Section.
(i) Borrower shall pay all out-of-pocket reasonable costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred Lender in connection with Successor the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include, without limitation, all fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including, without limitation, reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described herein and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance); the cost incurred by Lender to obtain a Rating Confirmation contemplated hereunder; reasonable Attorneys’ Fees and Costs; and a processing fee to cover Lender’s administrative costs to process Borrower’s assumption of Defeasance request. Lender reserves the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release right to require that Borrower from any liability or obligation relating post a deposit to any environmental matters arising under Section 5.1(F)cover costs which Lender reasonably anticipates will be incurred.
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Defeasance. (a) No Note may be prepaid or defeased in whole or in part prior to October 1, 2001 except with respect to application of casualty or condemnation proceeds as provided in the Notes and Mortgages. Provided there then exists no Event of Default (defined in the Mortgages) under any of the Loan Documents, commencing on October 1, 2001, a Note may be defeased in whole, but not in part (except with respect to application of casualty or condemnation proceeds as provided in the Notes and Mortgages and except in connection with a Required Ancillary Partial Defeasance) provided that the conditions applicable to defeasance set forth in the Note, and the conditions set forth herein, are satisfied. A Note may be defeased in whole in accordance on and subject to the terms and conditions set forth in the Note upon satisfaction of the provisions set forth in such Note pertaining to defeasance and provided that all Real Properties encumbered by Mortgages which remain cross-defaulted hereunder following the complete defeasance of a Note (for purposes of this Section 5, the "Remaining Real Properties") satisfy, in the aggregate, the Minimum Debt Service Coverage Ratio.
(b) In the event a Borrower elects a voluntary defeasance of a Note in full and the Remaining Real Properties do not, in the aggregate, satisfy the Minimum Debt Service Coverage Ratio, the Borrowers owning the Remaining Real Properties shall not be permitted at any time to defease all or any prepay such portion of the Loan except allocable to the Remaining Real Properties as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”)necessary for such Remaining Real Properties to satisfy, in either casethe aggregate, subject to the satisfaction of Minimum Debt Service Coverage Ratio (each Note made by the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event owner of a Partial Defeasance, the Individual Remaining Real Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing prepaid by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver product of multiplying the amount of the Loan required to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent be prepaid in order for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) Remaining Real Properties, in the case of a Full Defeasanceaggregate, to amend and restate satisfy the Note in Minimum Debt Service Coverage Ratio by a principal amount equal to fraction, the then numerator of which shall be the outstanding principal balance of the Loan (Note made by the “Full Defeased Note”)owner of a Remaining Real Property, and the denominator of which shall be the outstanding principal balance of all Notes made by the owners of all the Remaining Real Properties. The required prepayments shall be accomplished by a Required Ancillary Partial Defeasance in accordance with the terms of the Notes pertaining to partial defeasance thereof.
(iic) Upon consummation of the defeasance of a Note in whole, the resulting Defeased Note (defined in the Note) and the other Loan Documents (exclusive of this Loan Agreement) executed by the maker of the Note which has been defeased in full (for purposes of this Section 5, the "Original Owner") in connection therewith shall remain cross-defaulted with the case remainder of the Loan Documents, and any Defeased Notes resulting from a Required Ancillary Partial Defeasance shall remain cross-defaulted with the remainder of the Loan Documents, and Lender shall release the Second Mortgage and Second Security Agreement executed and delivered by the Original Owner. All other Loan Documents, including the Undefeased Notes (defined in the Notes) resulting from a Required Ancillary Partial Defeasance, to issue two substitute notes as follows: shall remain cross-defaulted with one another.
(Ad) one promissory note in a principal amount equal to 125% Upon consummation of the Allocated Loan Amount defeasance of a Note in whole, the Individual Property to resulting Defeased Note shall no longer be defeased (secured by any lien or security interest in the “Defeased Note”); Remaining Real Properties, and (B) the other promissory note having a principal balance equal Notes pertaining to the Allocated Loan Amounts Remaining Real Properties shall no longer be secured by any lien or security interest in the Real Property owned by the Original Owner on the date hereof. Except as aforesaid, the Notes pertaining to the Remaining Real Properties shall remain cross-collateralized by all Remaining Real Properties and, in addition, shall be cross-collateralized by a security interest in any Defeasance Deposit (defined in the Note) and any Defeasance Collateral (defined in the Note) established in connection with the defeasance of all Individual Properties (including a Note in full and in connection with any Required Ancillary Partial Defeasance of other Notes in connection therewith, by the Individual Property being defeased) less the amount maker of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case owner of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to Remaining Real Property (or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents ) executing and the Security Agreement, together with the pledged delivering to Lender a Subordinated Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm (defined in the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(FNotes).
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Defeasance. Borrower shall not be permitted at any time to defease all or any portion The parties acknowledge that the consummation of the Loan except as expressly provided transactions contemplated in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after Agreement involves the date which is two (2) years after the StartT-Up Day Bird 5310 Seller securing a release of the last Note securitizedT-Bird 5310 Project, Borrower may voluntarily defease all of the Loan by defeasance (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), from the lien of the Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing recorded on December 16, 1999, as amended and assigned. Buyer agrees (and agrees to cause its lender) to cooperate with the Seller, its lender and others that are involved in either casethe Defeasance in securing the Defeasance, subject including, but not limited to funding all equity and causing Buyer’s lenders to fund at least one business day prior to the satisfaction actual Closing Date. Buyer shall incur no costs, expenses or liabilities in connection with the Defeasance, except with respect to any costs that may be incurred by Buyer as a result of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of with respect to the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying T-Bird 5310 Project: (i) a Payment the closing of its acquisition loan and causing its lender to fund the proceeds into escrow with the Escrow Agent at least two business days prior to the actual Closing Date with the actual closing (funding and recording) occurring on the “Defeasance Release Closing Date”) on which the Full Defeasance or Partial Defeasance is to occur, ; and (ii) in funding its equity into escrow with the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower Escrow Agent at least two business days prior to the actual Closing Date with the actual closing (funding and recording) occurring on the Closing Date. Notwithstanding the foregoing, Seller agrees to credit Buyer $1,500 per day for each day prior to the Closing Date that both (a) Seller requires Buyer to fund the Purchase Price applicable to the T-Bird 5310 Project and (b) that Buyer actually funded such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice amounts. Buyer acknowledges and revocation,
(c) Borrower agrees that Seller shall have paid the right to Lender all principal and interest accrued and unpaid on extend the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred Closing Date in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% the month end of the Allocated Loan Amount of month in which the Individual Property to be defeased (the “Defeased Note”)Closing Date is scheduled; and (B) the other promissory note having a principal balance equal for one additional month, if, through no fault of Seller, its lender is unable to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on close the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and as may have been extended under clause (iiA) RevPAR with respect to all above. Seller’s exercise of the Individual Properties for the trailing twelve foregoing extensions shall be made in writing to Buyer and Escrow Agent five (125) months immediately business days prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)current scheduled Closing Date.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at On any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date on which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying have been satisfied: (i) a Payment Date the Transferor has deposited (the “Defeasance Release Date”x) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on into the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial DefeasanceFunding Account, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”)Class A Certificates, which amount shall be invested in Eligible Investments and (iiy) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal if such defeasance occurs prior to the Allocated Loan Amounts of all Individual Properties (including Early Amortization Commencement Date, into the Individual Property being defeased) less the Reserve Account an amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00the Class A Covered Amount, and as estimated by the Transferor, for the period from the date of the deposit to the Principal Funding Account through the Class A Expected Final Payment Date; (ii) the Debt Service Coverage Ratio with respect Transferor has delivered to the Loan for Trustee an opinion of counsel to the trailing twelve effect that such deposit and termination of obligations as described below will not result in the Trust being required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and an opinion of counsel to the effect that following such deposit none of the Trust, the Reserve Account or the Principal Funding Account will be deemed to be an association (12or publicly traded partnership) months immediately taxable as a corporation; (iii) if such defeasance occurs prior to an Early Amortization Commencement Date, the Transferor has delivered to the Trustee a certificate of an officer of the Transferor stating that the Transferor reasonably believes that such Partial Defeasancedeposit and termination of its obligations will not constitute an Early Amortization Event or any event that, and
with the giving of notice or the lapse of time, would cause an Early Amortization Event or a Series 2003-__ Early Amortization Event to occur; and (iv) the Rating Agency Condition shall have been satisfied; then, the Series 2003-__ Certificates will no longer be entitled to the security interest of the Trust in the Receivables or, except those set forth in clause (i) In the case of a Partial above, any other Trust assets ("Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”"), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability Investor Percentages applicable to the allocation to Series 2003-__ Certificateholders of Collections of Principal Receivables, Finance Charge Receivables and the Defaulted Amount will be reduced to zero; provided, however, that if the Collateral Interest is held by the Transferor or an affiliate of the assignment documents and Transferor on the date the Transferor defeases the Class A Certificates, the Collateral Invested Amount will be reduced to zero. If the Collateral Interest or any portion thereof is not held by the Transferor or an affiliate of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating Transferor prior to any environmental matters arising under Section 5.1(Fsuch Defeasance the Transferor shall be obligated to satisfy any other conditions to Defeasance as are set forth in each applicable supplemental agreement as described in subsection 7.3(b).
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Target Receivables Corp)
Defeasance. Borrower shall With respect to any Mortgage Loan that contains a provision for any defeasance of mortgage collateral (a "Defeasance Loan"), the related Note or Mortgage provides that the defeasance option is not be permitted exercisable prior to a date that is at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is least two (2) years after following the Start-Up Day of the last Note securitizedClosing Date and is otherwise in compliance with applicable statutes, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days rules and regulations governing REMICs; requires prior written notice to Lender specifying the holder of the Mortgage Loan of the exercise of the defeasance option and payment by Borrower of all related reasonable fees, costs and expenses as set forth below; requires the Mortgage Loan (ior the portion thereof being defeased) to be assumed by a Payment Date (Single-Purpose Entity; and requires counsel to provide a legal opinion that the “Trustee has a perfected security interest in substitute collateral described below prior to any other claim or interest. In addition, each Mortgage Loan that is a Defeasance Release Date”) on which Loan permits defeasance only with substitute collateral constituting non-callable "government securities" within the Full Defeasance or Partial Defeasance is to occur, and (iimeaning of Treas. Reg. Section 1.860G-2(a)(8)(i) in the event of a Partial Defeasance, the Individual Property proposed an amount sufficient to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender make all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable scheduled payments under the Loan Documents,
Note (e) Borrower shall either deposit with Lender an amount equal to or the Defeasance Depositportion thereof being defeased, or, at Lender’s requestif such partial release involves the release of one or more Mortgaged Properties from a multi-property Mortgage Loan, 125% of the allocated loan amount for such released Mortgaged Properties) when due, and in the case of ARD Loans, assuming the Anticipated Repayment Date is the Maturity Date; and such Borrower is required to deliver from an independent accountant a letter certifying that such substitute collateral is sufficient to Lender make all scheduled payments under the Defeasance CollateralNote. In connection with To Seller's actual knowledge, defeasance under the foregoing, Borrower appoints Lender as Borrower’s agent Mortgage Loan is only for the purpose of applying facilitating the disposition of a Mortgaged Property and not as part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages. With respect to each Defeasance Deposit to purchase Loan, the Defeasance Collateral,
(f) related Note or Mortgage or other related loan document provides that the related Borrower shall execute (a) pay all Rating Agency fees associated with defeasance (if Rating Agency approval is a specific condition precedent thereto) and deliver all other reasonable expenses associated with defeasance, including, but not limited to, accountant's fees and opinions of counsel, or (b) provide all opinions required under the related loan documents, including, if applicable, a REMIC opinion and an opinion that the related security agreement is fully enforceable in accordance with its terms (subject to Lender all documents reasonably required applicable bankruptcy, insolvency, reorganization, receivership, moratorium, and other laws affecting the enforcement of creditors' rights generally, and by Lender (igeneral principles of equity) and any applicable rating agency letters confirming no downgrade or qualification of ratings on any classes in the case of a Full Defeasancetransaction. Additionally, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the for any Mortgage Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the thenCut-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be off Date Principal Balance equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance$20,000,000, the RevPAR with respect to Mortgage Loan or the Individual Properties securing related documents require confirmation from the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all Rating Agency that exercise of the Individual Properties as defeasance option will not cause a downgrade or withdrawal of the Closing Date, rating assigned to any securities backed by the Mortgage Loan and (ii) RevPAR with respect require the Borrower to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs any Rating Agency fees and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)defeasance.
Appears in 1 contract
Samples: Mortgage Loan Purchase Agreement (Credit Suisse First Boston Mortgage Securities Corp)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after On the date which is two (2) years after during the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of Amortization Period that the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying have been satisfied: (i) a Payment Date an amount shall have been deposited (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (iix) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount Funding Account equal to the Defeasance Depositsum of the Class A Outstanding Principal Amount, orthe Class B Outstanding Principal Amount and the CTO Outstanding Principal Amount, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
which amount shall be invested in Cash Equivalents and (f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (iy) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be Reserve Account equal to or greater than the excess of the sum of the Class A Monthly Interest, the Class B Monthly Interest and the estimated CTO Monthly Interest over the estimated amount of investment earnings on amounts in the Defeasance Funding Account, as estimated by the Transferor, for each of the Interest Accrual Periods during the period from the date of the deposit to the Defeasance Funding Account through the CTO Expected Final Payment Date (i) 1.51:1.00, and the "Required Defeasance Reserve Account Amount"); (ii) the Debt Service Coverage Ratio with respect Transferor shall have delivered to the Loan for Trustee an Opinion of Counsel to the trailing twelve effect that such deposit and termination of obligations will not result in the Trust being required to register as an "investment company" within the meaning of the Investment Company Act and an Opinion of Counsel to the effect that following such deposit none of the Trust, the Defeasance Reserve Account or the Defeasance Funding Account will be deemed to be an association (12or publicly traded partnership) months immediately prior taxable as a corporation; (iii) the Transferor shall have delivered to the Trustee a certificate of an officer of the Transferor stating that the Transferor reasonably believes that such Partial Defeasancedeposit and termination of its obligations will not constitute a Pay Out Event or any event that, with the giving of notice or the lapse of time, would cause a Pay Out Event to occur; and (iv) the Rating Agency Condition shall have been satisfied; then, the Series 1998-1 Securities will no longer be entitled to the security interest of the Trust in the Receivables and
, except those set forth in clause (i) In the case of a Partial above, other Trust assets ("Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion"), the assignment percentages applicable to the allocation to the Series 1998-1 Securityholders of Principal Collections, Finance Charge Collections, unpaid Adjustment Payments and assumption Default Amounts shall be reduced to zero and the Monthly Servicing Fee shall be reduced to zero; PROVIDED, HOWEVER, that no such Defeasance shall occur for so long as any Class A Charge-Offs, Class B Charge-Offs or CTO Charge-Offs exist. Upon the satisfaction of the Loanforegoing conditions, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower Class D Invested Amount shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating be reduced to any environmental matters arising under Section 5.1(F)zero.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Fingerhut Receivables Inc)
Defeasance. Borrower shall not be permitted at When any time to defease all or any portion of the Loan except Bond has been discharged as expressly provided in this Section 2.10Section, all pledges, covenants and other rights granted by this Ordinance shall cease as to the holder of such Bond. Provided that no Event All Bonds and coupons of Default has occurred any series due on any date may be discharged by depositing at the bank at which the Bonds and is continuingcoupons are payable, after on or before the due date, a sum sufficient for the payment thereof in full; and if any Bond or coupon should not be paid when due, the same may nevertheless be discharged by depositing with the paying agent a sum sufficient for the payment thereof in full with interest accrued from the due date to the date of such deposit. The City may discharge prepayable Bonds of any series which is two (2) years after are called for redemption or prepayment on any date when they are prepayable in accordance with their terms, by depositing with the Start-Up Day bank at which principal and interest are then payable, on or before that date, a sum sufficient for the payment thereof in full on the specified prepayment or redemption date, provided that notice of the last Note securitized, Borrower such redemption or prepayment has been duly given as herein provided. The City may voluntarily defease discharge each or all of the Loan (Bonds of any series and coupons appurtenant thereto at any time, when authorized by law, by irrevocably depositing in escrow with a “Full Defeasance”) or a portion suitable banking institution, for the purpose of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender paying all principal and interest accrued due on such Bonds prior to a date upon which all of them will be prepayable according to their terms and unpaid paying all remaining Bonds of that series on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated that date with the Full Defeasance any redemption premium when due, a sum of cash sufficient for this purpose, or Partial Defeasancesecurities in such aggregate face amount, as applicable (including, without limitation, fees of Rating Agencies and accountantsbearing interest at such rates, and fees incurred in connection maturing or callable at the option of the holder on such dates as shall be required, with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasanceadditional cash deposited, to amend and restate the Note in a principal amount equal to the then outstanding principal balance provide funds sufficient for this purpose; provided, that notice of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts redemption of all Individual Properties (including the Individual Property being defeased) less the amount prepayable Bonds of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral series has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined given in accordance with the Prudent Lender Standardterms hereinabove provided. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance The securities to be so deposited shall be released from the lien limited to general obligations of the applicable MortgageUnited States, securities whose principal and shall thereafter no longer interest payments are guaranteed by the United States and any other securities of federal agencies which may be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon authorized by law for such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)specific purpose.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “"Full Defeasance”") or a portion of the Loan (a “"Partial Defeasance”"), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “"Defeasance Release Date”") on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s 's giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s 's request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s 's agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “"Full Defeased Note”"), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “"Defeased Note”"); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “"Undefeased Note”"). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).the
Appears in 1 contract
Defeasance. Borrower shall not be permitted at 9.1.1 At any time subsequent to defease all or any portion of the Loan except as expressly Defeasance Lockout Period and prior to the Anticipated Repayment Date, provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (conditions set forth in Section 9.1.2 are complied with, Lender hereby agrees that Borrower shall have the right to obtain a “Full Defeasance”) or a portion release of the Loan (a “Partial Defeasance”), in either case, subject to Lien on the Property upon at least 30 days prior written notice upon satisfaction of the following conditions precedent:(each such release, after satisfaction of the other provisions of this Section 9.1, a DEFEASANCE):
(a) Any Full Defeasance or Partial Defeasance the execution and delivery of a defeasance note (the DEFEASANCE NOTE), in form and substance reasonably acceptable to Lender, dated as of the Loan by Borrower shall date of the Defeasance (which must be made on as of a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) payable to Lender, in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver Collateral Requirement (which Defeasance Note Lender agrees to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as accept by assignment from any new lender to Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,);
(fb) Borrower shall execute the execution and deliver to Lender all documents reasonably required by Lender (i) in the case delivery of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan security agreement (the “Full Defeased Note”DEFEASANCE SECURITY AGREEMENT), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying reasonably acceptable to Lender, dated as of the Prudent date of the Defeasance (which must be as of a Payment Date), in favor of the Lender, pursuant to which the Lender Standard, creating is granted a perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral (the “which Defeasance Security Agreement”Agreement Lender agrees to accept by assignment from any new lender to Borrower),;
(iic) for the execution by Lenderand delivery of appropriate and reasonable agreements and/or instruments, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying reasonably acceptable to Lender, pursuant to which the Prudent Lender Standard stating, among other things, (A) that, obligations and liabilities of Borrower under the Defeasance Collateral has been duly Note and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit Security Agreement are assumed by a new entity which satisfies all of the Single Purpose Entity requirements, upon which execution and a first priority perfected security interest in delivery Lender agrees to release Borrower from any and Lien on all liability under the Defeasance Collateral Note and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, Security Agreement; and
(vd) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation delivery of a Rating Agency Confirmation.
9.1.2 Simultaneously with Lender's receipt of the Defeasance Note and Defeasance Security Agreement from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency new lender, Lender shall transfer to withdraw, qualify the new lender or downgrade to Borrower's nominee the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial DefeasanceNote, the Debt Service Coverage Ratio with respect to Security Instrument and the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case Assignment of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable MortgageLeases, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note release or Defeased Note, as the case may be, terminate the other Loan Documents and (other than the Security Agreement, together with the pledged Environmental Indemnity).
9.1.3 With respect to a Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignmentpursuant to Section 9.1.1 hereof, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and shall deposit the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection accordance with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).9.1.5
Appears in 1 contract
Defeasance. Borrower shall not be permitted When we use the term defeasance, we mean discharge from some or all of our obligations under either indenture. Unless we inform you otherwise in the prospectus supplement, if we deposit with the Trustee funds or government securities sufficient to make payments on the debt securities of a series on the dates those payments are due and payable and comply with all other conditions to defeasance set forth in the indentures, then, at any time to defease all or any portion our option, either of the Loan except as expressly provided in this Section 2.10. Provided following will occur: • we will be discharged from our obligations with respect to the debt securities of that no Event of Default has occurred and is continuing, after the date which is two series (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasancelegal defeasance”), in either case, subject or • we will no longer have any obligation to comply with the satisfaction of restrictive covenants under the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurindentures, and the related events of default (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasancethe subordinated debt securities, covenant events) will no longer apply to amend us, but some of our other obligations under the indentures and restate the Note in a principal amount equal debt securities of that series, including our obligation to the then outstanding principal balance of the Loan make payments on those debt securities, will survive (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Notecovenant defeasance”). The Defeased Note and If we legally defease a series of debt securities, the Undefeased Note shall have terms identical holders of the debt securities of the series affected will not be entitled to the terms benefits of the Noteindentures, except for: • the rights of holders of that series of debt securities to receive, solely from a trust fund, payments in respect of such debt securities when payments are due, • our obligation to register the transfer or exchange of debt securities, • our obligation to replace mutilated, destroyed, lost or stolen debt securities, and • our obligation to maintain paying agencies and hold moneys for payment in trust. We may legally defease a series of debt securities notwithstanding any prior exercise of our option of covenant defeasance in respect of such series. In addition, the principal balance and a pro rata allocation subordinated note indenture provides that if we choose to have the legal defeasance provision applied to the subordinated debt securities, the subordination provisions of the Required Debt Service Paymentsubordinated note indenture will become ineffective. Neither a Full Defeased Note nor a Defeased Note may be The subordinated note indenture also provides that if we choose to have covenant defeasance apply to any series of debt securities issued pursuant to the subject of any further defeasance; after a Partial Defeasance, all references herein and subordinated note indenture we need not comply with the provisions relating to subordination. Unless we inform you otherwise in the other Loan Documents prospectus supplement, we will be required to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) Trustee an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will deposit and related defeasance would not cause any Rating Agency the holders of the debt securities to withdraw, qualify recognize gain or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction loss for federal income tax purposes and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer holders would be subject to restrictions federal income tax on transfer set forth herein. In connection with a defeasance of the Loansame amounts, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (in the “Successor Obligor”), all of Borrower’s obligations under same manner and at the Full Defeased Note or Defeased Note, same times as would have been the case may be, if the other Loan Documents deposit and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunderrelated defeasance had not occurred. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such we elect legal defeasance, such additional legal opinions that opinion of counsel must be based upon a ruling from Borrower’s the United States Internal Revenue Service or Successor Obligor’s counsel as Lender reasonably deems necessary a change in law to confirm the valid creation and authority of the Successor Borrower that effect. (including a nonSections 1401-consolidation opinion1404), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 1 contract
Samples: Paying and Calculation Agency Agreement (General Electric Co)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has occurred and is continuing, after the date which is earlier to occur of (i) two (2) years after the Start-Up Day of and (ii) three (3) years after the last Note securitizedClosing Date, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:Loan.
(ab) Any Full Defeasance or Partial Defeasance defeasance of the Loan by Borrower shall be made on a Payment Date,.
(bc) Borrower shall provide not be permitted at any time to defease all or any part of the Loan except as expressly provided in this Section 2.6.
(d) Subject to the terms and conditions of this Agreement, Borrower may defease the Loan if Borrower: (i) provides not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance payments provided in clauses (ii), (iii) and (iv) below are to be made and the deposit provided in clause (v) below is to occurbe made, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender pays all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
, (diii) Borrower shall pay to Lender pays all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable defeasance of the Loan (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if anydefeasance) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
, (eiv) Borrower shall either deposit deposits with Lender an amount equal to the Defeasance Deposit, or, Deposit or at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver request delivers to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: U.S. Obligations (A) one promissory note in a having maturity dates on or prior to, but as close as possible to, successive scheduled Payment Dates (after the Defeasance Release Date) upon which Payment Dates interest and principal amount equal to 125% of payments are required under the Allocated Loan Amount of Note through and including the Individual Property to be defeased (the “Defeased Note”); Maturity Date and (B) in amounts sufficient to pay all scheduled principal and interest payments on the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (Note on each Payment Date through and including the Individual Property being defeasedMaturity Date and any tax payable in respect of income earned by Borrower or Successor Obligor from such U.S. Obligations, and (v) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver delivers to Lender the following items:
(iA) a security agreement, in form and substance satisfying the Prudent Lender Standardsatisfactory to Lender, creating a first priority perfected Lien on the Defeasance Deposit deposits required pursuant to this Section 2.6 and the Defeasance Collateral U.S. Obligations purchased on behalf of Borrower in accordance with this Section 2.6 (the “Security Agreement”),
, (iiB) for execution by Lender, a release of each applicable Individual the Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual the Property is located,
, (iiiC) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.6 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
, (ivD) an opinion of Borrower’s counsel in form and substance satisfying the Prudent satisfactory to Lender Standard stating, among other things, (Ax) that, the Defeasance Collateral has U.S. Obligations have been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit deposits required pursuant to this Section 2.6 and a first priority perfected security interest in and Lien on the Defeasance Collateral U.S. Obligations purchased pursuant hereto and the Proceeds thereof and (By) that the subject Partial Defeasance defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
and (vE) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (Ax) written confirmation from the relevant Rating Agencies that such Partial Defeasance defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (By) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies amounts of the U.S. Obligations comply with all of the requirements of this Section 2.10,Agreement.
(he) In the case of a Partial DefeasanceThe U.S. Obligations shall mature on or be redeemable, the Debt Service Coverage Ratio with respect or provide for payment thereon, on or prior to the Undefeased Business Day immediately preceding the date on which payments under the Note are due and payable and the proceeds thereof shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect payable directly to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth hereinCash Collateral Account. In connection with a defeasance of the Loanforegoing, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of appoints Lender as Borrower’s obligations under agent for the Full Defeased Note or Defeased Note, as purpose of applying the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition amounts delivered pursuant to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary clause (d) above to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).purchase U.S.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after On the date which is two (2) years after during the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of Amortization Period that the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying have been satisfied: (i) a Payment Date an amount shall have been deposited (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (iix) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount Funding Account equal to the Defeasance Depositsum of the Class A Outstanding Principal Amount, orthe Class B Outstanding Principal Amount and the CTO Outstanding Principal Amount, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
which amount shall be invested in Cash Equivalents and (f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (iy) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be Reserve Account equal to or greater than the excess of the sum of the Class A Monthly Interest, the Class B Monthly Interest and the estimated CTO Monthly Interest over the estimated amount of investment earnings on amounts in the Defeasance Funding Account, as estimated by the Transferor, for each of the Interest Accrual Periods during the period from the date of the deposit to the Defeasance Funding Account through the CTO Expected Final Payment Date (i) 1.51:1.00, and the "Required Defeasance Reserve Account Amount"); (ii) the Debt Service Coverage Ratio with respect Transferor shall have delivered to the Loan for Trustee an Opinion of Counsel to the trailing twelve effect that such deposit and termination of obligations will not result in the Trust being required to register as an "investment company" within the meaning of the Investment Company Act and an Opinion of Counsel to the effect that following such deposit none of the Trust, the Defeasance Reserve Account or the Defeasance Funding Account will be deemed to be an association (12or publicly traded partnership) months immediately prior taxable as a corporation; (iii) the Transferor shall have delivered to the Trustee a certificate of an officer of the Transferor stating that the Transferor reasonably believes that such Partial Defeasancedeposit and termination of its obligations will not constitute a Pay Out Event or any event that, with the giving of notice or the lapse of time, would cause a Pay Out Event to occur; and (iv) the Rating Agency Condition shall have been satisfied; then, the Series 1998-1 Securities will no longer be entitled to the security interest of the Trust in the Receivables and
, except those set forth in clause (i) In the case of a Partial above, other Trust assets ("Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion"), the assignment percentages applicable to the allocation to the Series 1998-1 Securityholders of Principal Collections, Finance Charge Collections, unpaid Adjustment Payments and assumption Default Amounts shall be reduced to zero and the Monthly Servicing Fee shall be reduced to zero; provided, however, that no such Defeasance shall occur for so long as any Class A Charge-Offs, Class B Charge-Offs or CTO Charge-Offs exist. Upon the satisfaction of the Loanforegoing conditions, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower Class D Invested Amount shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating be reduced to any environmental matters arising under Section 5.1(F)zero.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Federated Department Stores Inc /De/)
Defeasance. Borrower shall not be permitted 18.2.1 The Issuer may, at its option and at any time time, elect to defease all have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Security and Covenant Defeasance”):
(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Bondholders cash or government bonds accepted by the Bond Trustee (the “Defeasance Pledge”) in such amounts as will be sufficient for the payment of principal (including if applicable premium payable upon exercise of a Call Option) and interest on the Outstanding Bonds to Final Maturity Date (or redemption upon an exercise of a notified Call Option) or any portion of other amount agreed between the Loan except as expressly provided in this Section 2.10. Provided that Parties;
(b) no Event of Default has shall have occurred and is continuing, after be continuing on the date which is two (2) years after the Start-Up Day of establishment of the last Note securitizedDefeasance Pledge, Borrower may voluntarily defease all or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time during any hardening period applicable to the Loan Defeasance Pledge (a “Full Defeasance”or the relevant period for non-Norwegian companies) or a portion of any other date agreed between the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Parties;
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on if the Principal Indebtedness to and including Bonds are secured, the Defeasance Release Date,Pledge shall be considered as a replacement of the security established prior to the Defeasance Pledge;
(d) Borrower the Issuer shall pay have delivered to Lender all reasonable out-of-pocket fees and expenses associated the Bond Trustee a certificate signed by its Chief Executive Officer that the Defeasance Pledge was not made by the Issuer with the Full Defeasance intent of preferring the Bondholders over any other creditors of the Issuer or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery intent of opinion letters related to such Full Defeasance defeating, hindering, delaying or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs defrauding any other creditors of any loan servicer (if any) in connection with the Full Defeasance Issuer or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,others; and
(e) Borrower the Issuer shall either deposit with Lender an amount equal have delivered to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents Bond Trustee any certificate or legal opinion reasonably required by Lender the Bond Trustee regarding the Security and Covenant Defeasance or Defeasance Pledge, including any certificate or legal opinion on (i) in the case compliance of a Full the conditions of the Security and Covenant Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all Pledge constitutes a valid, perfected and enforceable security in favour of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan Bond Trustee for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all benefit of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property Bondholders which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer will not be subject to restrictions on transfer set forth herein. In connection with a defeasance any rights of creditors of the LoanIssuer or any bankruptcy, Borrower shall assign to an entityinsolvency, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations reorganization or similar laws affecting creditors rights generally under the Full Defeased Note or Defeased Note, as laws of the case may be, jurisdiction where the other Loan Documents Defeasance Pledge was established and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority corporate domicile of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).Issuer,
Appears in 1 contract
Samples: Bond Agreement
Defeasance. Borrower shall With respect to any Schedule A-1 Loan that contains a provision for any defeasance of mortgage collateral (a "Defeasance Loan"), the related Mortgage Note or Mortgage provides that the defeasance option is not be permitted exercisable prior to a date that is at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is least two (2) years after following the Start-Up Day of the last Note securitizedClosing Date and is otherwise in compliance with applicable statutes, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days rules and regulations governing REMICs; requires prior written notice to Lender specifying the holder of the Schedule A-1 Loan of the exercise of the defeasance option and payment by Borrower of all related reasonable fees, costs and expenses as set forth below; requires, or permits the lender to require, the Schedule A-1 Loan (ior the portion thereof being defeased) to be assumed by a Payment Date single-purpose entity; and requires counsel to provide a legal opinion that the Trustee has a perfected security interest in such collateral prior to any other claim or interest. In addition, each Schedule A-1 Loan that is a Defeasance Loan permits defeasance only with substitute collateral constituting "government securities" within the meaning of Treas. Reg. Section 1.860G-2(a)(8)(i) in an amount sufficient to make all scheduled payments under the Mortgage Note (or the “Defeasance Release Date”portion thereof being defeased) on which the Full Defeasance or Partial Defeasance is to occurwhen due, and (ii) in the event case of a Partial DefeasanceARD Loans, assuming the Individual Property proposed to be defeased; providedAnticipated Repayment Date is the Maturity Date. To Seller's actual knowledge, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable defeasance under the Schedule A-1 Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent is only for the purpose of applying facilitating the disposition of a Mortgaged Property and not as part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages. With respect to each Defeasance Deposit to purchase Loan, except as set forth on Schedule C-29, the Defeasance Collateral,
(f) related Mortgage or other related loan document provides that the related Borrower shall execute (a) pay all Rating Agency fees associated with defeasance (if rating confirmation is a specific condition precedent thereto) and deliver to Lender all documents reasonably other reasonable expenses associated with defeasance, including, but not limited to, accountant's fees and opinions of counsel, or (b) provide all opinions required by Lender (i) under the related loan documents, including, if applicable, a REMIC opinion and a perfection opinion and any applicable rating agency letters confirming no downgrade or qualification of ratings on any classes in the case of a Full Defeasancetransaction. Additionally, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the for any Schedule A-1 Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the thenCut-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be off Date Principal Balance equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance$19,900,000, the RevPAR with respect to Schedule A-1 Loan or the Individual Properties securing related documents require confirmation from the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all Rating Agency that exercise of the Individual Properties as defeasance option will not cause a downgrade or withdrawal of the Closing Date, rating assigned to any securities backed by the Schedule A-1 Loan and (ii) RevPAR with respect require the Borrower to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s any Rating Agency fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 1 contract
Samples: Mortgage Loan Purchase Agreement (Credit Suisse Fr Bs Mor Sec Cp Com Mor Ps Th Ce Ser 2001-Ck1)
Defeasance. Borrower shall not be permitted have the right at any time after the First Open Defeasance Date and prior to defease all or any portion the First Open Prepayment Date to obtain a release of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day Lien of the last Note securitized, Borrower may voluntarily defease all of Mortgage encumbering the Loan Mortgaged Property (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the upon satisfaction of the following conditions precedentconditions:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide not less than fifteen Lender at least thirty (1530) days days’ prior written notice to Lender (or such shorter period of time if permitted by Lender) specifying (i) a Payment Date date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal satisfied the conditions in this Section 2.7(a) and interest accrued and unpaid on the Principal Indebtedness to and including which it shall effect the Defeasance Release (provided such notice may be revoked by Borrower, not more than twice during any three (3) year period during the term of the Loan, if: (A) such revocation is made in writing, within a reasonable period prior to such Defeasance Date,
; (dB) such revocation is effected in accordance with any applicable servicing agreement; and (C) Borrower shall pay to Lender all reasonable out-of-pocket fees reimburses Lender’s costs and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable attorneys’ fees and out-of-pocket costs expenses) incurred as a result of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,such revocation);
(eii) Borrower shall either deposit with Lender an amount equal pay to Lender: (A) all payments of interest due on the Loan to and including the Defeasance DepositDate; and (B) all other sums, orthen due under the Note, at Lender’s requestthis Loan Agreement, deliver to Lender the Mortgage and the other Loan Documents;
(iii) Borrower shall irrevocably deposit the Defeasance Collateral. In connection Collateral into the Defeasance Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,this Section 2.7(a) and Sections 2.7(c) and (d) hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Defeasance Collateral;
(gv) Borrower shall deliver to Lender an opinion of counsel for Borrower that is customary in commercial lending transactions and subject only to normal qualifications, assumptions and exceptions opining to any matter as then required by the following items:
Rating Agencies in connection with similar transactions and including, among other things, that: (iA) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on security interest in the Defeasance Deposit Collateral Account and the Defeasance Collateral Collateral; and (B) if a Securitization has occurred, the REMIC Trust formed pursuant to such Securitization will not fail to maintain its status as a “Security Agreement”real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the Defeasance pursuant to this Section 2.7(a),;
(iivi) for execution If and to the extent required by Lenderthe Rating Agencies, Borrower shall deliver to Lender a release of each applicable Individual Property being defeased non-consolidation opinion with respect to the Successor Borrower;
(vii) Borrower shall deliver to Lender a confirmation in writing from the lien applicable Rating Agencies to the effect that the Defeasance Collateral complies with all applicable Rating Agency criteria so as to not result in a downgrading, withdrawal or qualification of the applicable Mortgage respective ratings in a form appropriate effect immediately prior to such defeasance for the jurisdiction Certificates issued in connection with the Securitization which such Individual Property is located,are then outstanding;
(iiiviii) Borrower shall deliver an Officerofficer’s Certificate of Borrower certificate certifying that the requirements set forth in this Section 2.10 2.7 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivix) an opinion Borrower shall deliver a certificate of counsel in form and substance satisfying the Prudent a nationally recognized public accounting firm reasonably acceptable to Lender Standard stating, among other things, (A) that, certifying that the Defeasance Collateral has been duly and validly assigned and delivered will generate monthly amounts equal to Lender and Lender has a first priority perfected security interest in and Lien on or greater than the Scheduled Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, andPayments;
(vx) Borrower shall deliver such other certificates, opinions, documents or and instruments as Lender may reasonably request includingrequest, without limitation, provided the same do not materially increase Borrower’s obligations or decrease Borrower’s rights hereunder; and
(Axi) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued Borrower shall pay all costs and expenses of Lender incurred in connection with any Secondary Market Transaction the defeasance, including Lender’s reasonable attorneys’ fees and (B) expenses and Rating Agency fees and expenses. If a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with occurs and all of the requirements of this Section 2.10,
(h) In 2.7 have been satisfied, Lender shall execute any and all documents required to release the case Mortgaged Property, all Account Collateral and all other Collateral from the Lien of a Partial Defeasancethe Mortgage and the Assignment of Rents and Leases, and to terminate the Local Collection Account Agreement, the Debt Service Coverage Ratio with respect Collection Account Agreement and all Direction Letters, and cause all Account Collateral held by or on behalf of Lender to be released to Borrower, and the Defeasance Collateral, pledged pursuant to the Undefeased Note Security Agreement, shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case sole source of a Partial Defeasance, the RevPAR with respect to the Individual Properties collateral securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth hereinLoan. In connection with a defeasance any such release of the LoanLien, Borrower shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Defeasance Date (or such shorter time as permitted by Lender), a release of Lien (and related Loan Documents) for execution by Lender. Such release shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying form appropriate in the Prudent Lender Standard, all jurisdiction in which the Mortgaged Property is located and contain standard provisions protecting the rights of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignmenta releasing lender. In addition, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as shall provide all other documentation Lender reasonably deems necessary requires to confirm the valid creation and authority of the Successor be delivered by Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrowerin connection with such release. Borrower shall pay all out-of-pocket costs costs, taxes and expenses incurred by Lenderassociated with the release of the Lien of the Mortgage and the Assignment of Rents and Leases, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)attorneys’ fees.
Appears in 1 contract
Defeasance. Borrower If the Issuer shall not be permitted at any time to defease all pay or any portion provide for the payment of the Loan except as expressly provided in entire indebtedness on all Series 2007A Bonds (including, for the purposes of this Section 2.10. Provided that no Event of Default has occurred and is continuing11.1, after Series 2007A Bonds held by the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) outstanding in any one or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction more of the following conditions precedentways:
(a) Any Full Defeasance by paying or Partial Defeasance causing to be paid the principal of and interest on all Series 2007A Bonds outstanding, as and when the Loan by Borrower shall be made on a Payment Date,same become due and payable;
(b) Borrower shall provide not less than fifteen by depositing with the Bond Trustee, in trust, at or before maturity, moneys in an amount sufficient to pay or redeem (15when redeemable) days prior written notice all Series 2007A Bonds outstanding (including the payment of interest payable on such Series 2007A Bonds to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance maturity or Partial Defeasance is to occurredemption date thereof), and (ii) in the event of a Partial Defeasanceprovided that such moneys, the Individual Property proposed to be defeased; providedif invested, that, Borrower shall be required invested in Escrow Obligations in an amount, without consideration of any income or increment to defease accrue thereon, sufficient to pay or redeem (when redeemable) and discharge the Loan indebtedness on all Series 2007A Bonds outstanding at or before their respective maturity dates; it being understood that the Defeasance Release Date specified in investment income on such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender Escrow Obligations may be used for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,other purpose under the Act;
(c) Borrower shall have paid by delivering to Lender the Bond Trustee, for cancellation by it, all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,Series 2007A Bonds outstanding; or
(d) Borrower by depositing with the Bond Trustee, in trust, moneys or Escrow Obligations in such amount as the Bond Trustee shall determine will, together with the income or increment to accrue thereon, without consideration of any reinvestment thereof, be fully sufficient to pay or redeem (when redeemable) and discharge the indebtedness on all Series 2007A Bonds outstanding at or before their respective maturity dates (which determination shall be made in reliance upon an accountant’s verification report reasonably accepted to the Bond Trustee); and if the Issuer shall pay or cause to Lender all reasonable out-of-pocket fees and expenses associated with be paid or make arrangements satisfactory to the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees Bond Trustee for the payment of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due payable hereunder by the Issuer, and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal if any such Series 2007A Bonds are to be optionally redeemed prior to the Defeasance Depositmaturity thereof, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection irrevocable notice of such redemption shall have been given in accordance with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose requirements of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower this Bond Indenture or irrevocable instructions shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal have been given to the then outstanding principal balance Bond Trustee of such notice, this Bond Indenture and the estate and rights granted hereunder shall cease, determine, and be discharged, and thereupon the Bond Trustee shall, upon Written Request of the Loan (the “Full Defeased Note”)Issuer, and (ii) in upon receipt by the case Bond Trustee of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of the Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel Independent Counsel, each stating that in form the opinion of the signers all conditions precedent to the satisfaction and substance satisfying the Prudent Lender Standard statingdischarge of this Bond Indenture have been complied with, among other things, (A) that, the Defeasance Collateral has been duly forthwith execute proper instruments acknowledging satisfaction of and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral discharging this Bond Indenture and the Proceeds thereof lien hereof. The satisfaction and (B) that discharge of this Bond Indenture shall be without prejudice to the subject Partial Defeasance will not adversely affect rights of the status of Bond Trustee to charge and be reimbursed by the Issuer and the Borrower for any REMIC formed expenditures which it may thereafter incur in connection with a Secondary Market Transactionherewith. Any moneys, and
funds, securities, or other property remaining on deposit in the Expense Fund, Interest Fund, Bond Sinking Fund, Project Fund, Redemption Fund or in any other fund or investment under this Bond Indenture (vother than the Escrow Obligations or other moneys deposited in trust as above provided) such other certificatesshall, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from upon the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements full satisfaction of this Section 2.10,
(h) In the case of a Partial DefeasanceBond Indenture, the Debt Service Coverage Ratio with respect forthwith be transferred, paid over and distributed to the Undefeased Note shall be equal Issuer and the Borrower, as their respective interests may appear. The Issuer or the Borrower may at any time surrender to the Bond Trustee for cancellation by it any Series 2007A Bonds previously authenticated and delivered, which the Issuer or greater than (i) 1.51:1.00the Borrower may have acquired in any manner whatsoever, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement andSeries 2007A Bonds, upon such assignmentsurrender and cancellation, Borrower shall, except as set forth herein, shall be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition deemed to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation be paid and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)retired.
Appears in 1 contract
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Lender receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”) for Lender’s processing of the Defeasance. If Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including does not receive the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial DefeasanceFee, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the right to obtain Defeasance Deposit pursuant to purchase the that Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by LenderFee, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of but Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among fails to perform its other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligationsthis Section, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm will have the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).right
Appears in 1 contract
Samples: Multifamily Loan and Security Agreement (Steadfast Income REIT, Inc.)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance If the principal portion or Partial Defeasance Prepayment Price of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurall Certificates, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and the interest portion due or to become due thereon including all other sums then amounts due under related Hedge Agreements, shall be paid at the times and payable under in the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal manner stipulated in such Certificates and in this Trust Agreement, and all amounts owing to the Defeasance DepositTrustee under this Trust Agreement shall have been paid, orthen the pledge of the Trust Estate and all covenants, at Lender’s requestagreements and other obligations of the Governing Board under this Trust Agreement in favor of such Certificates shall thereupon cease, deliver to Lender the Defeasance Collateralterminate and become void and be discharged and satisfied. In connection such event, the Trustee shall cause statements for such period or periods as shall be requested by the Governing Board to be prepared and filed with the foregoingGoverning Board and, Borrower appoints Lender as Borrower’s agent for upon the purpose request of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower Governing Board, shall execute and deliver to Lender the Governing Board all documents reasonably required by Lender (i) in such instruments as may be desirable to evidence such discharge and satisfaction, and the case of a Full Defeasance, to amend and restate the Note in a principal amount equal Trustee shall pay over or deliver to the then outstanding principal balance Governing Board all moneys or securities held by it pursuant to this Trust Agreement which are not required for the payment of the Loan (the “Full Defeased Note”)principal portion or Prepayment Price, if applicable, and interest portion due or to become due with respect to such Certificates not theretofore surrendered for such payment or prepayment or for the payment of amounts owing to any Credit Facility Issuer under a Reimbursement Agreement or as ground rent under any Ground Lease.
(iib) Certificates for the payment or prepayment of which moneys shall have been set aside sufficient to pay the principal portion, the Prepayment Price, if applicable, and interest portion to become due to maturity or earlier prepayment, shall be held in trust by the case Trustee as escrow holder (through deposit by the Governing Board of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% funds for such payment or prepayment of the Allocated Loan Amount Purchase Option Price of one or more Facilities pursuant to Section 7.3 of the Individual Property to be defeased (the “Defeased Note”); and (BMaster Lease or otherwise) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean have been paid within the Undefeased Notemeaning and with the effect expressed in subsection (a) of this Section 801 except that the obligation of the Governing Board to make, unless expressly or cause to be made, Basic Lease Payments from such set‐aside amounts shall continue. Any Outstanding Certificates shall, prior to the maturity or Prepayment Date thereof, be deemed to have been paid within the meaning and with the effect expressed in subsection (a) of this Section 801 if the Trustee shall receive an Opinion of Counsel to that effect and (a) in case any of said Certificates are to be prepaid on any date prior to their maturity, the Governing Board shall have given to the Trustee irrevocable instructions in writing from an Authorized Governing Board Representative to mail as provided otherwise,
in Article III a notice of prepayment of such Certificates (gother than Certificates which have been purchased by the Trustee at the direction of the Governing Board or purchased or otherwise acquired by the Governing Board and delivered to the Trustee as hereinafter provided prior to the mailing of such notice of prepayment) Borrower on said date, (b) there shall deliver have been deposited with the Trustee as escrow holder moneys consisting of either cash in an amount which shall be sufficient, or Defeasance Securities the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the Trustee as escrow holder at the same time, shall be sufficient, to Lender pay when due the following items:
principal portion or Prepayment Price, if applicable, and interest portion due and to become due with respect to said Certificates on or prior to the prepayment date or maturity date thereof, as the case may be, and (c) in the event said Certificates are not by their terms subject to prepayment within the next succeeding 60 days, the Governing Board shall have given the Trustee in form satisfactory to it, instructions to mail a notice to the Holders of such Certificates that the deposit required by (b) above has been made with the Trustee as escrow holder and that said Certificates are deemed to have been paid in accordance with this Section 801 and stating such maturity or Prepayment Date upon which moneys are expected to be available for the payment of the principal or Prepayment Price, if applicable, of said Certificates, other than Certificates which have been purchased by the Trustee at the direction of the Governing Board or purchased or otherwise acquired by the Governing Board and delivered to the Trustee as hereinafter provided prior to the mailing of the notice of prepayment referred to in clause (a) above. The Trustee shall, if so directed by the Governing Board (i) a security agreement, prior to the maturity date of Certificates deemed to have been paid in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
accordance with this Section 801 which are not to be prepaid prior to their maturity date or (ii) for execution by Lender, a release of each applicable Individual Property being defeased from prior to the lien mailing of the applicable Mortgage notice of prepayment referred to in a form appropriate for the jurisdiction in which such Individual Property is located,
clause (iiia) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio above with respect to any Certificates deemed to have been paid in accordance with this Section 801 which are to be prepaid on any date prior to their maturity, apply moneys deposited with the Undefeased Note Trustee as escrow holder in respect of such Certificates or sell Defeasance Securities so deposited with the Trustee and apply the proceeds thereof to the purchase of such Certificates and the Trustee shall immediately thereafter cancel all such Certificates so purchased; provided, however, that the moneys and Defeasance Securities remaining on deposit with the Trustee after the purchase and cancellation of such Certificates shall be equal sufficient to pay when due the principal or greater than (i) 1.51:1.00Prepayment Price, if applicable, of, and (ii) the Debt Service Coverage Ratio with respect interest portion due or to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR become due with respect to all Certificates, in respect of which such moneys and Defeasance Securities are being held by the Individual Properties Trustee on or prior to the Prepayment Date or maturity date thereof, as the case may be. If, at any time (i) prior to the maturity date of the Closing Date, and Certificates deemed to have been paid in accordance with this Section 801 which are not to be prepaid prior to their maturity date or (ii) RevPAR prior to the mailing of the notice of prepayment referred to in clause (a) with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior any Certificates deemed to such Partial Defeasance, each as determined have been paid in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10801 which are to be prepaid on any date prior to their maturity, the Individual Property which is Governing Board shall purchase or otherwise acquire any such Certificates and deliver such Certificates to the subject of such Full Defeasance Trustee prior to their maturity date or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased NotePrepayment Date, as the case may be, the other Loan Documents Trustee shall immediately cancel all such Certificates so delivered; such delivery of Certificates to the Trustee shall be accompanied by directions from the Governing Board to the Trustee as to the manner in which such Certificates are to be applied against the obligation to pay or prepay Certificates deemed paid in accordance with this Section 801. The directions given by the Governing Board to the Trustee referred to in the preceding sentences shall also specify the portion, if any, of such Certificates so purchased or delivered and canceled to be applied against the obligation to pay Certificates deemed paid in accordance with this Section 801 upon their maturity date or dates and the Security portion, if any, of such Certificates so purchased or delivered and canceled to be applied against the obligation to prepay Certificates deemed paid in accordance with this Section 801 on any date or dates prior to their maturity. In the event that on any date as a result of any purchases, acquisitions and cancellations of Certificates as provided in this Section 801, the total amount of moneys and Defeasance Securities remaining on deposit with the Trustee under this Section 801 is in excess of the total amount which would have been required to be deposited with the Trustee on such date in respect of the remaining Certificates in order to satisfy subclause (b) of this subsection of Section 801, the Trustee shall, if requested by the Governing Board, pay the amount of such excess to the Governing Board free and clear of any trust, lien, pledge or assignment securing said Certificates or otherwise existing under this Trust Agreement. Except as otherwise provided in this subsection of Section 801, neither Defeasance Securities nor moneys deposited with the Trustee pursuant to this Section 801 nor principal or interest payments on any such Defeasance Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal portion or Prepayment Price, if applicable, and interest portion represented by said Certificates; provided that any cash received from such principal or interest payments on such Defeasance Securities deposited with the Trustee, (A) to the extent such cash will not be required at any time for such purpose, as verified by a certificate delivered to the Trustee by a firm of independent certified public accountants acceptable to the Trustee, shall be paid over to the Governing Board as received by the Trustee, free and clear of any trust, lien or pledge securing said Certificates or otherwise existing under this Trust Agreement, together with and (B) to the pledged extent such cash will be required for such purpose at a later date, shall, to the extent practicable, be reinvested in Defeasance Collateral. The Successor Obligor shall assumeSecurities maturing at times and in amounts sufficient to pay when due the principal or Prepayment Price, in a writing if applicable, and interest represented by said Certificates on or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note prior to such prepayment date or the Defeased Notematurity date thereof, as the case may be, and interest earned from such reinvestment shall be paid over to the other Loan Documents Governing Board, as received by the Trustee, free and clear of any trust, lien, pledge or assignment securing said Certificates or otherwise existing under this Trust Agreement.
(c) Anything in this Trust Agreement to the Security Agreement andcontrary notwithstanding, upon any moneys held by the Trustee in trust for the Payment of any of the Certificates which remain unclaimed for six (6) years after the date when such assignmentCertificates have become due and Payable, Borrower either at their stated maturity dates or by call for prepayment, if such moneys were held by the Trustee at such date, or for six (6) years after the date of deposit of such moneys if deposited with the Trustee after the said date when such certificates became due and payable, shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm at the valid creation and authority written request of the Successor Borrower (including a non-consolidation opinion)Governing Board be repaid by the Trustee to the Governing Board, the assignment as its absolute property and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrowerfree from trust, and the enforceability of the assignment documents Trustee shall thereupon be released and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection discharged with Successor Borrower’s assumption of the Loan, the Security Agreement respect thereto and the Defeasance Collateral. Nothing in this Section 2.10 Certificate Holders shall release Borrower from any liability or obligation relating look only to any environmental matters arising under Section 5.1(F)the Governing Board for the payment of such Certificates.
Appears in 1 contract
Samples: Master Trust Agreement
Defeasance. Borrower shall not be permitted at (a) At any time during the period commencing on (i) the first Business Day after the date that is the earlier of (A) two years after the "startup day," within the meaning of Section 860G(a)(9) of the Code, of a "real estate mortgage investment conduit," within the meaning of Section 860d of the Code (a "REMIC"), that holds the Mortgage Note and (B) three years after the Closing Date, and ending on (ii) the date that is three (3) months prior to the Anticipated Repayment Date (such period being sometimes referred to herein as the "DEFEASANCE PERIOD"), and provided no Event of Default has occurred and is continuing (other than on Event of Default that will be cured by the release of a Mortgaged Property or Mortgaged Properties from the Lien of the Security Documents pursuant to the provisions of Section 7.1.3 hereof), Borrower may voluntarily defease all or any portion of the Loan except as expressly provided in this Section 2.10by providing Lender with the Defeasance Deposit (hereinafter, a "DEFEASANCE EVENT"). Provided that no Each Defeasance Event of Default has occurred and is continuing, after by the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, shall be subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide not less than fifteen twenty (1520) days prior written notice to Lender specifying (i) a Payment Date regularly scheduled payment date (the “Defeasance Release Date”"DEFEASANCE DATE") on which the Full Defeasance or Partial Defeasance Event is to occur, and (ii) in . Such notice shall indicate the event principal amount of a Partial Defeasance, the Individual Property proposed Mortgage Note to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,;
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(dii) Borrower shall pay to Lender all reasonable out-of-pocket fees accrued and expenses associated with unpaid interest on the Full principal balance of the Mortgage Note to but not including the Defeasance or Partial DefeasanceDate. If for any reason the Defeasance Date is not a regularly scheduled payment date, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with Borrower shall also pay interest that would have accrued on the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under Mortgage Note through the Loan Documents,next regularly scheduled payment date;
(eiii) Borrower shall either deposit with pay to Lender an amount equal to all other sums, not including scheduled interest or principal payments, due under the Defeasance DepositMortgage Note, orthis Agreement, at Lender’s requestthe Mortgage, deliver and the other Loan Documents;
(iv) Borrower shall pay to Lender the required Defeasance Collateral. Deposit for the Defeasance Event;
(v) In connection with the foregoingevent only a portion of the Loan is the subject of the Defeasance Event, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender prepare all necessary documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) notes, one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount defeased portion of the Defeased original Note (the “Undefeased Note”"DEFEASED NOTE") and the other note having a principal balance equal to the undefeased portion of the Note (the "UNDEFEASED NOTE"). The Defeased Note and the Undefeased Note shall have identical terms identical to as the terms of the Note, Note except for the principal balance and a pro rata allocation of the Required Debt Service Paymentbalance. Neither a Full A Defeased Note nor a Defeased Note may cannot be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Defeasance Event;
(gvi) Borrower shall execute and deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standardsatisfactory to Lender, creating a first priority perfected Lien lien on the Defeasance Deposit and the U.S. Obligations purchased with the Defeasance Collateral Deposit in accordance with this provision of this SECTION 2.5 (the “Security Agreement”THE "DEFEASANCE SECURITY AGREEMENT"),;
(iivii) Borrower shall deliver an opinion of counsel for execution Borrower in form satisfactory to Lender in its sole discretion stating, among other things, that Borrower has legally and validly transferred and assigned the U.S. Obligations and all obligations, rights and duties under and to the Mortgage Note or Defeased Note (as applicable) to the Successor Borrower, that Lender has a perfected first priority security interest in the Defeasance Deposit and the U.S. Obligations delivered by LenderBorrower, that such Defeasance will not adversely affect the status of the entity holding the interest in the Mortgage Note as a release REMIC (assuming for such purpose that such entity otherwise qualifies as a REMIC) and that such Defeasance will not result in a deemed exchange of each applicable Individual Property being defeased the Certificates pursuant to SECTION 1001 of the Code;
(viii) Borrower shall deliver a Rating Comfort Letter from the lien of Rating Agencies in connection with the Defeasance Event. If required by the applicable Mortgage Rating Agencies, the Borrower shall also deliver or cause to be delivered a Substantive Non-Consolidation Opinion with respect to the Successor Borrower in a form appropriate for and substance satisfactory to Lender and the jurisdiction in which such Individual Property is located,applicable Rating Agencies;
(iiiix) Borrower shall deliver an Officer’s 's Certificate of Borrower certifying that the requirements set forth in this Section 2.10 SECTION 2.5(a) have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivx) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered Borrower shall deliver to Lender and Lender has a first priority perfected security interest in and Lien on certificate of Borrower's independent certified public accountant certifying that the U.S. Obligations purchased with the Defeasance Deposit and a first priority perfected security interest in and Lien on will generate monthly amounts equal to or greater than the required Scheduled Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, andPayments;
(vxi) Borrower shall deliver such other certificates, documents or instruments as Lender may reasonably request including, without limitation, request; and
(Axii) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued Borrower shall pay all costs and expenses of Lender incurred in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies Event, including any costs and expenses associated with all a release of the requirements Lien of this Section 2.10,the Mortgage as provided in SECTION 2.8 hereof or SECTION 2.9 hereof, as applicable, as well as reasonable attorneys' fees and expenses.
(hb) In connection with each Defeasance Event, Borrower hereby appoints Lender as its agent and attorney-in-fact for the purpose of using the Defeasance Deposit to purchase U.S. Obligations which provide payments on or prior to, but as close as possible to, all successive Due Dates after the Defeasance Date upon which interest payments are required under the Mortgage Note, in the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan Defeasance Event for the trailing twelve (12) months immediately prior to such Partial Defeasanceentire outstanding principal balance of the Loan, and
(i) In or the Defeased Note, in the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all Defeasance Event for only a portion of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance outstanding principal balance of the Loan, Borrower shall assign as applicable, and in amounts equal to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations scheduled payments due on such Due Dates under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Mortgage Note or the Defeased Note, as applicable, and assuming such Mortgage Note or Defeased Note is paid in full on the case may beAnticipated Repayment Date (the "SCHEDULED DEFEASANCE PAYMENTS"). Borrower, pursuant to the other Loan Documents and the Defeasance Security Agreement andor other appropriate document, upon such assignment, Borrower shall, except as set forth herein, shall authorize and direct that the payments received from the U.S. Obligations may be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition made directly to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower Cash Collateral Account (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred unless otherwise directed by Lender) and applied to satisfy the obligations of Borrower under the Mortgage Note or the Defeased Note, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)as applicable.
Appears in 1 contract
Samples: Loan Agreement (Arden Realty Inc)
Defeasance. Borrower shall not be permitted at (a) On any time to defease all or any portion date after the expiration of the Loan except as expressly Lockout Period, provided in this Section 2.10. Provided that no Event of Default has occurred is then continuing and is continuing, after subject to the date which is two (2) years after the Start-Up Day of the last Note securitizednotice requirement described in Section 2.1(c), Borrower may voluntarily defease all obtain the release of the Loan Collateral (a “Full Defeasance”other than the Defeasance Collateral) or a portion of from the liens created by the Loan (a “Partial Defeasance”), in either case, subject Documents upon the payment to Lender of all sums then due under the satisfaction Loan Documents and the delivery of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) Defeasance Collateral sufficient to provide payments on or prior to, and in any event as close as possible to, all successive Payment Dates in an amount sufficient to make all payments of interest and principal due hereunder (including the then outstanding Principal Indebtedness on the first Payment Date in the Prepayment Period or such other date during the Prepayment Period as Borrower shall specify), taking into account any income tax payable on any net annual income of Borrower or the Defeasance Borrower, as applicable;
(ii) written confirmation from an independent certified public accounting firm reasonably satisfactory to Lender that such Defeasance Collateral is sufficient to provide the payments described in clause (i) above;
(iii) a security agreement, in form and substance satisfying the Prudent Lender Standardreasonably satisfactory to Lender, creating in favor of Lender a first priority perfected Lien on the Defeasance Deposit and the security interest in such Defeasance Collateral (the a “Security Defeasance Pledge Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,;
(iv) an opinion of counsel for Borrower, in form and substance satisfying the Prudent reasonably satisfactory to Lender Standard statingand delivered by counsel reasonably satisfactory to Lender, among other things, opining (A1) that, that the Defeasance Collateral Pledge Agreement has been duly authorized and validly assigned is enforceable against Borrower in accordance with its terms and delivered to Lender and that Lender has a perfected first priority perfected security interest in and Lien on the such Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof Collateral; and (B2) that the subject Partial Defeasance will does not adversely affect constitute a “significant modification” of the status Loan under Section 1001 of any REMIC formed in connection with the Code or cause a Secondary Market Transaction, andtax to be imposed on the Securitization Vehicle;
(v) Rating Confirmation with respect to such Defeasance;
(vi) instruments reasonably satisfactory to Lender releasing and discharging or assigning to a third party Lender’s Liens on the Collateral (other than the Defeasance Collateral);
(vii) such other certificates, opinions, documents or instruments as Lender and the Rating Agencies may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, request; and
(iviii) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties reimbursement for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket any costs and expenses incurred by Lender, Lender in connection with this Section 2.1 (including Lender’s reasonable attorney’s Rating Agency and Servicer fees and expenses, incurred reasonable fees and expenses of legal counsel and any revenue, documentary stamp or intangible taxes or any other tax or charge due in connection herewith). Lender shall reasonably cooperate with Borrower to avoid the incurrence of mortgage recording taxes in connection with Successor a Defeasance, which cooperation may include assigning the Note to a refinancing lender in consideration of receipt of a new defeasance note and rights under the Defeasance Pledge Agreement.
(b) At the time of Defeasance, Borrower shall transfer and assign all of its interest in the Property to a third party, unless the Loan is assumed by a bankruptcy-remote entity satisfactory to Lender and the Rating Agencies to which Borrower shall transfer all of the Defeasance Collateral (a “Defeasance Borrower’s ”) and such Defeasance Borrower shall have executed and delivered to Lender an assumption agreement in form and substance reasonably satisfactory to Lender, such Uniform Commercial Code financing statements as may be reasonably requested by Lender and legal opinions of counsel reasonably acceptable to Lender which are substantially equivalent to the opinions delivered to Lender on the Closing Date, including new nonconsolidation opinions reasonably satisfactory to Lender and satisfactory to the Rating Agencies; and Borrower and the Defeasance Borrower shall have delivered such other documents, certificates and legal opinions as Lender shall reasonably request, in which event Borrower shall be completely released and relieved of all of its obligations under the Loan Documents except those obligations which by their terms survive the repayment of the Loan.
(c) Borrower must give Lender at least 30 days’ prior written notice of any Defeasance under this Section 2.1, specifying the Security Agreement and date on which the Defeasance Collateral. Nothing is expected to occur.
(d) Upon satisfaction of the requirements contained in this Section 2.10 2.1, Lender will execute and deliver to Borrower such instruments, prepared by Borrower and approved by Lender, as shall be necessary to release Borrower the Property from any liability or obligation relating to any environmental matters arising under Section 5.1(F)the Liens of the Loan Documents.
Appears in 1 contract
Samples: Loan Agreement (KBS Real Estate Investment Trust II, Inc.)
Defeasance. Borrower shall not be permitted 18.2.1 The Issuer may, at its option and at any time time, elect to defease all or any portion have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Covenant Defeasance”);
(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Loan except Bondholders cash or government obligations accepted by the Bond Trustee (the “Defeasance Pledge”) in such amounts as expressly provided will be sufficient for the payment of Principal (including if applicable premium payable upon exercise of a Call Option) and interest on the Outstanding Bonds to Maturity Date (or redemption upon a exercise of a notified Call Option);
(b) the Issuer shall, if required by the Bond Trustee, provide a legal opinion reasonable acceptable to the Bond Trustee to the effect that the Bondholders will not recognize income, gain or loss for income tax purposes (hereunder US federal or Norwegian, if applicable) as a result of the Defeasance Pledge and Covenant Defeasance, and will be subject to such income tax on the same amount and in this Section 2.10. Provided that the same manner and at the same times as would have been the case if the Defeasance Pledge had not occurred;
(c) no Event of Default has shall have occurred and is continuingbe continuing on the date of establishment of the Defeasance Pledge, or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 181st day after the date of establishment of the pledge;
(d) neither the Defeasance Pledge nor the Covenant Defeasance results in a breach or violation of any material agreement or instrument binding upon the Issuer, or the articles of association or other corporate documents governing the Issuer;
(e) the Issuer shall have delivered to the Bond Trustee a certificate signed by its Chief Executive Officer that the Defeasance Pledge was not made by the Issuer with the intent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others;
(f) the Issuer shall have delivered to the Bond Trustee any certificate or legal opinion reasonably required regarding the Covenant Defeasance or Defeasance Pledge (including certificate from its Chief Executive Officer and a legal opinion from its legal counsel to the effect that all conditions for Covenant Defeasance have been complied with; and that the Defeasance Pledge (i) will not be subject to any rights of creditors of the Issuer, (ii) will constitutes a valid, perfected and enforceable security interest in favour of the Bond Trustee for the benefit of the Bondholders, and (iii) will, after the date which is two (2) years after 181st day following the Start-Up Day of establishment, the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, funds and assets so pledged will not be subject to the satisfaction effects of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally under the laws of the following conditions precedent:jurisdiction where the Defeasance Pledge was established and the corporate domicile of the Issuer.
18.2.2 Upon the exercise by the Issuer of its option under Clause 18.2.1;
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower Issuer shall be made on a Payment Date,released from its obligations under all provisions in Clause 13, except 13.2.1 (a), (e), (h) and (i).
(b) Borrower the Issuer shall provide not less than fifteen (15and shall ensure that all Group Companies shall not) days prior written notice take any actions that may cause the value of the security interest created by this Covenant Defeasance to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurbe reduced, and (ii) in shall at the event request of a Partial Defeasancethe Bond Trustee execute, the Individual Property proposed or cause to be defeased; providedexecuted, thatsuch further documentation and perform such other acts as the Bond Trustee may reasonably require in order for the security interests to remain valid, Borrower shall be required to defease enforceable and perfected by the Loan on Bond Trustee for the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to account of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Bondholders;
(c) Borrower all other provisions of the Bond Agreement (except (a) — (b) above) shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including remain fully in force without any modifications.
18.2.3 All moneys amount covered by the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” Pledge shall be deemed to mean applied by the Undefeased NoteBond Trustee, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements provisions of this Section 2.10Bond Agreement, to the Individual Property which is payment to the subject Bondholders of such Full Defeasance or Partial Defeasance all sums due to them under this Bond Agreement on the due date thereof. Any excess funds not required for the payment of principal, premium and interest to the Bondholders (including any expenses, fees etc. due to the Bond Trustee hereunder) shall be released from returned to the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Issuer.
Appears in 1 contract
Samples: Bond Agreement (Ocean Rig UDW Inc.)
Defeasance. Borrower shall not be permitted 18.2.1 The Issuer may, at its option and at any time time, elect to defease all or any portion have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Covenant Defeasance”);
(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Loan except Bondholders cash or government obligations acceptable by the Bond Trustee (the “Defeasance Pledge”) in such amounts as expressly provided will be sufficient for the payment of principal and interest on the Outstanding Bonds to Maturity Date;
(b) the Issuer shall, if required by the Bond Trustee, provide a legal opinion reasonable acceptable to the Bond Trustee to the effect that the Bondholders will not recognize income, gain or loss for income tax purposes (under US federal or Norwegian tax law, if applicable) as a result of the Defeasance Pledge and Covenant Defeasance, and will be subject to such income tax on the same amount and in this Section 2.10. Provided that the same manner and at the same times as would have been the case if the Defeasance Pledge had not occurred;
(c) no Event of Default has shall have occurred and is continuingbe continuing on the date of establishment of the Defeasance Pledge, or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 181st day after the date which is two (2) years after the Start-Up Day of establishment of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,Pledge;
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with neither the Full Defeasance Pledge nor the Covenant Defeasance results in a breach or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs violation of any loan servicer (if any) in connection with material agreement or instrument binding upon the Full Defeasance Issuer, or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,certificate of association or partnership agreement governing the Issuer;
(e) Borrower the Issuer shall either deposit with Lender an amount equal have delivered to the Defeasance Deposit, or, at Lender’s request, deliver to Lender Bond Trustee a certificate signed by the Chief Executive Officer of the GP that the Defeasance Collateral. In connection Pledge was not made by the Issuer with the foregoingintent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, Borrower appoints Lender as Borrower’s agent for hindering, delaying or defrauding any other creditors of the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,Issuer or others;
(f) Borrower the Issuer shall execute and deliver have delivered to Lender all documents the Bond Trustee any certificate or legal opinion reasonably required by Lender regarding the Covenant Defeasance or Defeasance Pledge (including certificate from the Chief Executive Officer of the GP and a legal opinion from its legal counsel to the effect that all conditions for Covenant Defeasance have been complied with; and that (i) in the case Defeasance Pledge will not be subject to any rights of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance creditors of the Loan (the “Full Defeased Note”)Issuer, and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to Defeasance Pledge will constitute a valid, perfected and enforceable security interest in favour of the Loan Bond Trustee for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all benefit of the Individual Properties as of the Closing DateBondholders, and (iiiii) RevPAR with respect to all after the 181st day following the establishment of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10Defeasance Pledge, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, funds and shall thereafter no longer assets so pledged will not be subject to restrictions on transfer set forth herein. In connection with a defeasance the effects of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally under the laws of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (jurisdiction where the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents Defeasance Pledge was established and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority corporate domicile of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Issuer.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at (a) At any time prior to defease the ARD Prepayment Date for any Outstanding Series of Term Notes with the latest Anticipated Repayment Date (such Payment Date, the “Defeasance Payment Date”), the Issuer may obtain the release from all or any portion covenants of this Base Indenture relating to ownership and leasing of the Loan except as expressly provided Contributed IP Addresses by delivering United States government securities that provide for payments on each Payment Date which replicate the required payments and scheduled Targeted Amortization Amounts, if any, due under the Transaction Documents with respect to all of the Notes then Outstanding, including the Indenture Trustee Fee and any other amounts due and owing to the Indenture Trustee, the Verification Agent Fee and any other amounts due and owing to the Verification Agent, the Servicing Fee, Other Servicing Fees and any other amounts due and owing to the Servicer through the Defeasance Payment Date for each Series of Notes (including payment in this Section 2.10. Provided full of the principal of the Notes on the related Defeasance Payment Date); provided, that (i) no Event of Default has occurred and is continuing, after ; (ii) the Issuer shall pay or deliver on the date which is two of such defeasance (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Date”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Outstanding Class Principal Indebtedness Balance of each Class of Notes to and but not including the Defeasance Release Date (and, if the Defeasance Date is not a Payment Date,
(d) Borrower shall pay , the interest that would have accrued to Lender all reasonable out-of-pocket fees and expenses associated with but not including the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicablenext Payment Date), reasonable fees and out-of-pocket costs of any loan servicer (if anyb) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”)Payments; and (Biii) the other promissory note having a principal balance equal notice shall have been delivered to the Allocated Loan Amounts of all Individual Properties (including Rating Agencies. In addition, the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuer shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating a first priority perfected Lien Indenture Trustee on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien behalf of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has Secured Parties a first priority perfected security interest in the U.S. government securities so delivered by the Issuer, (2) an Opinion of Counsel as to the enforceability and Lien on the Defeasance Deposit and a first priority perfected perfection of such security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B3) a certificate from confirmation by an Independent certified public accountant certifying accounting firm that the U.S. government securities so delivered are sufficient to pay all interest due from time to time after the Defeasance Collateral complies Date (or if the Defeasance Date is not a Payment Date, due after the next Payment Date) and all principal due upon maturity for each Class of Notes, and all Indenture Trustee Fee and any other amounts due and owing to the Indenture Trustee, Servicing Fees, Other Servicing Fees and any other amounts due and owing to the Servicer and the Verification Agent Fee and any other amounts due and owing to the Verification Agent, if any. The Issuer, pursuant to the security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be made directly to the Indenture Trustee and applied to satisfy the obligations of the Issuer under the Notes and the other Transaction Documents.
(b) If the Issuer will continue to own any material assets other than the U.S. government securities delivered in connection with all the defeasance, the Issuer shall establish or designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee (acting at the direction of the Servicer), with respect to which a substantive non-consolidation Opinion of Counsel reasonably satisfactory to the Indenture Trustee (consistent with the prior non-consolidation Opinion of Counsel most recently delivered to the Indenture Trustee) has been delivered to the Indenture Trustee and to transfer to that entity the pledged U.S. government securities. The new entity shall assume the obligations of the Issuer under the Notes being defeased and the security agreement and the Issuer and the Guarantor shall be relieved of their obligations in respect thereof under the Transaction Documents. The Issuer shall pay Ten Dollars ($10) to such new entity as consideration for assuming such obligations.
(c) If the Issuer satisfies the requirements of this Section 2.10,
(h2.11(a) In to defease the case Notes and delivers to the Indenture Trustee an Officer’s Certificate of a Partial Defeasancethe Issuer and an Opinion of Counsel in compliance with Section 15.01, the Debt Service Coverage Ratio with respect Indenture Trustee shall promptly execute, acknowledge and deliver to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) Issuer a release of the Debt Service Coverage Ratio with respect Collateral under the applicable Transaction Documents in recordable form to the Loan extent applicable for such release; provided that the trailing twelve (12) months immediately prior Issuer shall, at their sole expense, prepare any and all documents and instruments necessary to effect such Partial Defeasancerelease, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance the reasonable approval of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerIndenture Trustee, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower Issuer shall pay all out-of-pocket costs and expenses reasonably incurred by Lender, the Indenture Trustee (including Lender’s reasonable attorney’s attorneys’ fees and expenses, incurred disbursements) in connection with Successor Borrower’s assumption the review, execution and delivery of the Loan, the Security Agreement documents and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating instruments necessary to any environmental matters arising under Section 5.1(F)effect such release.
Appears in 1 contract
Samples: Base Indenture (Cogent Communications Holdings, Inc.)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Release Date and prior to the Start-Up Day Maturity Date to voluntarily defease all, or any portion of, the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan applicable Security Instrument or Security Instruments (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen thirty (1530) days prior written notice to (or such shorter period of time if permitted by Lender in its sole discretion) but not more than ninety (90) days notice specifying (i) a Payment Date date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance Event is to occur, and ;
(ii) Unless otherwise agreed to in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, thatwriting by Lender, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid pay to Lender (A) all payments of principal and interest accrued due and unpaid payable on the Principal Indebtedness Loan to and including the Defeasance Release Date (provided, that, if such Defeasance Date is not a Monthly Payment Date,
(d) , Borrower shall also pay to Lender all reasonable out-of-pocket fees payments of principal and expenses associated with interest due on the Full Defeasance or Partial DefeasanceLoan to and including the next occurring Monthly Payment Date); (B) all other sums, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Note, this Agreement, the Security Instruments and the other Loan Documents,Documents through and including the Defeasance Date (or, if the Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, Rating Agency and other fees, costs and expenses paid or incurred by Lender or its agents in connection with the Defeasance Event, the release of the lien of the applicable Security Instrument on the applicable Individual Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement, the Defeasance Collateral Account and related documentation; and (D) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of the Note or the Defeasance Event;
(eiii) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender Collateral into the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower shall execute and deliver to Lender a Security Agreement in respect of the Defeasance Collateral Account and the Defeasance Collateral;
(v) In the event only a portion of the Loan is the subject of the Defeasance Event, Borrower shall prepare all necessary documents reasonably required by Lender (i) in the case of a Full Defeasance, to modify this Agreement and to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) for the Note, one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount defeased portion of the original Note and a maturity date equal to the Maturity Date (the “Defeased Note”) and the other note having a principal balance equal to the undefeased portion of the original Note and a maturity date equal to the Maturity Date (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have identical terms identical to as the terms of the Note, original Note except for the principal balance and a pro rata allocation of the Required Debt Service Paymentbalance. Neither a Full A Defeased Note nor a Defeased cannot be the subject of any further Defeasance Event. The Undefeased Note may be the subject of any a further Defeasance Event in accordance with the terms and provisions of this Section 2.8 (the term “Note”, as used in this clause (v) for such purpose, being deemed to refer to the Undefeased Note that is the subject of further defeasance; after a Partial Defeasance), all references herein and provided, however, that no such partial defeasance shall take place unless the conditions outlined in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Section 2.9.2 are satisfied;
(gvi) Borrower shall deliver to Lender the following items:
(i) an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (A) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on security interest in the Defeasance Deposit Collateral Account and the Defeasance Collateral; (B) if a Securitization has occurred (1) the REMIC Trust formed pursuant to such Securitization and/or any subsequent or prior Securitization of the Loan (or any portion thereof or interest therein) will each not fail to maintain their respective status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the IRS Code as a result of a Defeasance Event pursuant to this Section 2.8 and (2) the Defeasance Event would not (I) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.1001-3(b) or (II) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860(a)(3)(A) of the IRS Code; (C) the Defeasance Event will not result in a deemed exchange for purposes of the IRS Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes; and (D) delivery of the Defeasance Collateral (and the “Security Agreement”),
grant of a security interest therein to Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law; and (ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,New Non-Consolidation Opinion with respect to Successor Borrower;
(iiivii) Borrower shall deliver to Lender a Rating Agency Confirmation as to the Defeasance Event;
(viii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivix) an opinion Borrower shall deliver a certificate of counsel in form and substance satisfying the Prudent a nationally recognized public accounting firm acceptable to Lender Standard stating, among other things, (A) that, certifying that the Defeasance Collateral has been duly and validly assigned and delivered will generate monthly amounts equal to Lender and Lender has a first priority perfected security interest in and Lien on or greater than the Scheduled Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, Payments; and
(vx) Borrower shall deliver such other certificates, opinions, documents or and instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)request.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at (a) On any time to defease all or any portion date after the expiration of the Loan except as expressly Lockout Period, provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after then continuing and subject to the date which is two (2) years after the Start-Up Day of the last Note securitizednotice requirement described in Section 2.1(d), Borrower may voluntarily defease all from time to time obtain the release of one or more of the Properties from the Liens of the Loan (a “Full Defeasance”) Documents by Defeasing either the entire Loan, or a portion of the Loan (a “Partial Defeasance”), in either case, subject equal to the satisfaction sum of the Release Prices of the Properties so released, provided that after giving effect thereto, unless the Loan is Defeased in full, the DSCR for the Test Period then most recently ended, recalculated to include only income and expense attributable to the Properties remaining after the contemplated release and to exclude the interest expense on the aggregate amount Defeased, shall be no less than the DSCR Threshold; and provided further that all sums then due to Lender under the Loan Documents are paid and the following conditions precedentare delivered to Lender:
(ai) Any Full Defeasance Collateral sufficient to provide payments on or Partial Defeasance prior to, and in any event as close as possible to, all successive Payment Dates in an amount sufficient (x) to pay the interest due on such Payment Dates in respect of a portion of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice equal to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, amount Defeased and (iiy) in to repay the event outstanding principal balance of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease such portion of the Loan on the first Payment Date in the Prepayment Period;
(ii) written confirmation from an independent certified public accounting firm reasonably satisfactory to Lender that such Defeasance Release Date specified Collateral is sufficient to provide the payments described in clause (i) above;
(iii) a security agreement, in form and substance reasonably satisfactory to Lender, creating in favor of Lender a first priority perfected security interest in such notice unless such notice Defeasance Collateral (a “Defeasance Pledge Agreement”);
(iv) an opinion of counsel for Borrower, in form and substance reasonably satisfactory to Lender and delivered by counsel reasonably satisfactory to Lender, opining (1) that the Defeasance Pledge Agreement has been duly authorized and is revoked enforceable against Borrower in writing by Borrower prior to the accordance with its terms and that Lender has a perfected first priority security interest in such Defeasance Release Date in which event Borrower Collateral; and (2) that the Defeasance does not constitute a “significant modification” of the Loan under Section 1001 of the Code or cause a tax to be imposed on the Securitization Vehicle;
(v) if the Loan has been securitized, the Rating Condition with respect to such Defeasance shall immediately reimburse have been satisfied; | NY\1631294.13 mle xx xxxx Loan Agreement||
(vi) instruments reasonably satisfactory to Lender releasing and discharging or assigning to a third party Lender’s Liens on the Collateral so released (other than the Defeasance Collateral);
(vii) such other customary certificates, opinions, documents or instruments as Lender and the Rating Agencies may reasonably request; and
(viii) reimbursement for any reasonable costs and expenses incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable this Section 2.1 (including, without limitation, Rating Agency and Servicer fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable)expenses, reasonable fees and out-of-pocket costs expenses of legal counsel and any loan servicer revenue, documentary stamp or intangible taxes or any other tax or charge due in connection herewith), provided, however, that Borrower shall only be obligated to pay Servicer fees up to (i) $30,000 if anythe Loan is Defeased in full (without any prior partial Defeasance), (ii) $10,000 if the Loan is Defeased in part for each partial Defeasance, or (iii) if the Loan is Defeased in full after one or more previous partial Defeasances, the greater of (x) $30,000 in the aggregate for all partial and full Defeasances, or (y) the sum of $10,000 multiplied by the total number of partial and full defeasances. Lender shall reasonably cooperate with Borrower to avoid the incurrence of mortgage recording taxes in connection with the Full a Defeasance or Partial Defeasance, as applicable, at Borrower’s sole cost and all other sums then due and payable under expense.
(b) If the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Depositis not Defeased in full, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, necessary to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue with two substitute notes as follows: Notes (A) which shall be cross-defaulted with each other): one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount Defeased portion of the original Note (the “Defeased Note”) and one note having a principal balance equal to the undefeased portion of the original Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note Notes may be the subject of any a further defeasance; after a Partial Defeasance, all references herein and Defeasance in accordance with the other Loan Documents to terms of this Section 2.1 (the term “Note” shall be ”, as used in this Section 2.1, being deemed to mean refer to the Undefeased Note, unless expressly provided otherwise,Note that is the subject of further Defeasance).
(gc) Borrower shall deliver cause the Defeased Note to be assumed by a bankruptcy-remote entity established or designated by Borrower in accordance with Lender’s reasonable requirements and subject to Lender’s reasonable approval, to which Borrower shall transfer all of the Defeasance Collateral (a “Defeasance Borrower”). Such Defeasance Borrower shall have executed and delivered to Lender the following items:
(i) a security agreement, an assumption agreement in form and substance satisfying reasonably satisfactory to Lender, such Uniform Commercial Code financing statements as may be reasonably requested by Lender and legal opinions of counsel reasonably acceptable to Lender that are substantially equivalent to the Prudent opinions delivered to Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by LenderClosing Date, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered new nonconsolidation opinions reasonably satisfactory to Lender and Lender has a first priority perfected security interest in satisfactory to the Rating Agencies; and Lien on Borrower and the Defeasance Deposit Borrower shall have delivered such other documents, certificates and a first priority perfected security interest in legal opinions as Lender shall reasonably request. | NY\1631294.13 mle xx xxxx Loan Agreement||
(d) Borrower must give Lender and Lien each Rating Agency at least 30 days’ (and not more than 60 days’) prior written notice of any Defeasance under this Section 2.1, specifying the date on which the Defeasance Collateral and the Proceeds thereof is to occur. If such Defeasance is not made within seven days after such date (x) Borrower’s notice of Defeasance will be deemed rescinded, and (By) that the subject Partial Defeasance will not adversely affect the status Borrower shall on such date pay to Lender all reasonable losses, costs and expenses suffered by Lender as a consequence of any REMIC formed in connection with a Secondary Market Transaction, andsuch rescission.
(ve) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all Upon satisfaction of the requirements of contained in this Section 2.10,
(h) In the case of a Partial Defeasance2.1, the Debt Service Coverage Ratio with respect Lender will execute and deliver to the Undefeased Note Borrower such instruments, prepared by Borrower and approved by Lender, as shall be equal necessary to release the applicable Property or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and Liens of the Loan Documents as or to assign the obligation applicable portion of Successor Borrower. Borrower shall pay all out-of-pocket costs such Liens and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption the Defeased portions of the Loan, Note to a third party to the Security Agreement and extent necessary to avoid the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)incurrence of mortgage recording taxes.
Appears in 1 contract
Samples: Loan Agreement (Cole Credit Property Trust III, Inc.)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrower shall have the right at any time after the date which is two (2) years after Defeasance Lockout Release Date and prior to the Start-Up Day Open Period Start Date to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen thirty (1530) days prior written days’ notice to (or such shorter period of time if permitted by Lender in its sole discretion) but not more than ninety (90) days’ notice specifying (i) a Payment Date date (the “Total Defeasance Release Date”) on which the Full Total Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender (A) all payments of principal and interest due and payable on the Loan to and including the Total Defeasance Date (provided that, if such Total Defeasance Date is not a Monthly Payment Date, Borrower shall also pay to Lender all payments of principal and interest due on the Loan to and including the next occurring Monthly Payment Date); (B) all other sums, if any, then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, appraisal, Rating Agency and other reasonable out-of-pocket fees fees, costs and expenses associated with the Full Defeasance paid or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred by Lender or its agents in connection with the delivery Total Defeasance Event, the release of opinion letters the lien of Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement and related to such Full Defeasance documentation; and (D) any revenue, documentary stamp, intangible or Partial Defeasanceother taxes, as applicable), reasonable charges or fees and out-of-pocket costs of any loan servicer (if any) due in connection with the Full transfer or assumption of the Note and/or the Total Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,Event.
(eiii) Borrower shall either deposit with Lender an amount equal to the Total Defeasance Collateral into the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Total Defeasance Collateral;
(gv) Borrower shall deliver to Lender the following items:
an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (iA) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) if a Securitization has occurred (1) the REMIC Trust formed pursuant to such Securitization and/or any subsequent or prior Securitization of the Loan or any portion thereof or interest therein will each not fail to maintain their respective status as a “Security Agreement”),real estate mortgage investment conduit” within the meaning of Section 860D of the IRS Code as a result of a Total Defeasance Event pursuant to this Section 2.8 and (2) the Total Defeasance Event would not (I) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.1001-3 or (II) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the IRS Code; and (C) the Total Defeasance Event will not result in a deemed exchange for purposes of the IRS Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes; and (D) a New Non-Consolidation Opinion with respect to the Successor Borrower;
(iivi) for execution by Lender, Borrower shall deliver to Lender a release of each applicable Individual Property being defeased from Rating Agency Confirmation as to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,Total Defeasance Event;
(iiivii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied satisfied;
(viii) Borrower shall deliver a certificate of an Approved Account Firm certifying that the Total Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all Rating Agency fees and expenses and all other reasonable out-of-pocket costs and expenses of Lender incurred in connection with the Total Defeasance Event, including, without limitation, that no Event of Default has occurred Lender’s reasonable attorneys’ fees and is continuing,expenses.
(ivb) an opinion of counsel in form If Borrower has elected to defease the entire Note and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall thereafter no longer be subject to restrictions on transfer set forth hereinthe sole source of collateral securing the Note. In connection with a defeasance the release of the Loanlien, Borrower shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Total Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a release of lien (and related Loan Documents) for execution by Lender. Such release shall be in a Special-Purpose Entity (form appropriate in the “Successor Obligor”)jurisdiction in which the Property is located and shall contain standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreementdocumentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, an Officer’s Certificate certifying that such documentation (i) is in a writing or writings satisfying the Prudent Lender Standard, compliance with all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerApplicable Law, and (ii) will affect such release in accordance with the enforceability terms of the assignment documents and of the Loan Documents as the obligation of Successor Borrowerthis Agreement. Borrower shall pay all out-of-pocket costs costs, taxes and expenses incurred by Lenderassociated with the release of the lien of the Security Instrument, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)attorneys’ fees.
Appears in 1 contract
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note. Multifamily Loan and Security Agreement – Seniors Housing Page 70
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Lender receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”) for Lender’s processing of the Defeasance. If Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including does not receive the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial DefeasanceFee, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the right to obtain Defeasance Deposit pursuant to purchase the that Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)11.
Appears in 1 contract
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 12.12 will apply if the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 12.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which the Defeasance Release Date specified Notice is received by Lender. Lender will acknowledge receipt of the Defeasance Notice and will state in such notice unless such notice is revoked in writing by receipt whether Lender will designate the Successor Borrower prior or will permit Borrower to designate the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Successor Borrower’s giving of such notice and revocation,.
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the The Defeasance Release Date,
Notice must be accompanied by a $10,000 non-refundable fee (d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full “Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased NoteFee”). The Defeased Note and If Lender does not receive the Undefeased Note shall have terms identical Defeasance Fee, then Borrower’s right to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents obtain Defeasance pursuant to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:that Defeasance Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”),
(ii) Fee as liquidated damages for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement default and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).,
Appears in 1 contract
Samples: Seniors Housing Loan and Security Agreement (Care Investment Trust Inc.)
Defeasance. Borrower shall So long as this Agreement is not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuingearlier terminated, after the date which is then two (2) years business days following the later of (I) the expiration of the Due Diligence Period, and (II) the Operating Partnership’s deposit of the Additional Deposit with the Escrow Agent, Contributors shall take such actions, at Contributor’s sole cost and expense, as are necessary for the defeasance of the Existing Loan in accordance with Section 5(d) of the Existing Note, including but not limited to (i) engaging a defeasance consultant to supervise the defeasance process and source appropriate defeasance collateral, to the extent reasonably necessary, (ii) requesting and finalizing draft defeasance documentation from the Existing Lender including the Defeasance Security Agreement (as defined in the Existing Note), (iii) paying any deposits required by Existing Lender for legal or other third party fees and paying any other fees or costs payable to Existing Lender, (iv) preparing any opinion of counsel required by Existing Lender, (v) preparing any accountant opinion required by Existing Lender, (vi) obtaining any rating agency approval required by Existing Lender, and (vii) forming and capitalizing any successor entity necessary to act as the continuing borrower after the Start-Up Day of Existing Loan has been released from the last Note securitizedProperty (the actions required to defease the Existing Loan, Borrower may voluntarily defease all of including but not limited to (i)-(vii) hereof, the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”). Contributors shall diligently pursue all steps required for the Defeasance, and the Operating Partnership shall use commercially reasonable efforts, at Contributor’s sole cost and expense, to cooperate in either casesuch actions in order to facilitate the Defeasance; provided, subject however, that the Operating Partnership shall have no obligation to incur any liability therewith. All documents and liens evidencing the Existing Loan encumbering the Property must be satisfied or released on or before the Closing Date. This Agreement is expressly contingent upon satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurDefeasance, and (iiis subject to termination pursuant to the provisions of Section 3.1(a) in the event of a Partial the failure of Contributors to complete the Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 1 contract
Samples: Contribution Agreement (Independence Realty Trust, Inc)
Defeasance. Borrower shall not be permitted The Issuers at any time to defease may terminate all or any portion their obligations under the Notes, the Indenture, the Collateral Documents and the Intercreditor Agreement, and cause the release of all Liens on the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two Collateral granted under such Collateral Documents (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasancelegal defeasance”), in either caseexcept for certain obligations, subject including those respecting the defeasance trust and obligations to register the satisfaction transfer or exchange of the following conditions precedent:
(a) Any Full Defeasance Notes, to replace mutilated, destroyed, lost or Partial Defeasance stolen Notes and to maintain a registrar and paying agent in respect of the Loan by Borrower shall be made Notes. The Issuers at any time may have the Lien on a Payment Datethe Collateral granted under the Collateral Documents released and may terminate their obligations under the covenants described under “— Certain covenants,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (” the “Defeasance Release Date”) on which operation of the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasancecross acceleration provision, the Individual Property proposed bankruptcy provisions with respect to be defeased; provided, that, Borrower shall be required to defease Significant Subsidiaries and the Loan on judgment default provision described under “— Defaults” and the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection undertakings and covenants contained under “— Change of control” and with Borrower’s giving of such notice and revocation,
clause (c4) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the first paragraph under “Full Defeased Note”)— Merger, and (ii) in the case of a Partial Defeasanceamalgamation, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts consolidation or sale of all Individual Properties or substantially all assets” (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Notecovenant defeasance”). The Defeased If the Issuers exercise their legal defeasance option or their covenant defeasance option, Holdings, Intermediate Holdings and each Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may Guarantor will be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased automatically released from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio their obligations with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial DefeasanceHoldings Guarantee, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, Intermediate Holdings Guarantee and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased NoteGuarantee, as the case may be, with respect to the other Loan Documents and Notes. The Issuers may exercise their legal defeasance option notwithstanding their prior exercise of their covenant defeasance option. If the Security AgreementIssuers exercise their legal defeasance option with respect to the Notes, together payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the Issuers exercise their covenant defeasance option with respect to the Notes, payment of the Notes may not be accelerated because of an Event of Default specified in clause (4), (5), (6) (with respect only to Significant Subsidiaries), (7) or (8) under “— Defaults” or because of the failure of the Issuer to comply with the pledged Defeasance Collateral. The Successor Obligor shall assumefirst clause (4) under “— Merger, amalgamation, consolidation or sale of all or substantially all assets.” In order to exercise either defeasance option with respect to the Notes, the Issuers must irrevocably deposit in trust (the “defeasance trust”) with the Trustee cash in U.S. dollars, U.S. dollar-denominated Government Obligations or a combination thereof sufficient, in the opinion of a writing nationally recognized firm of independent public accountants, investment bank or writings satisfying appraisal firm engaged by the Prudent Lender StandardIssuer expressed in a written certification thereof delivered to the Trustee (insofar as any U.S. dollar-denominated Government Obligations are so included), all for the payment of Borrower’s obligations under principal, premium (if any) and interest on the Full Defeased Note Notes to redemption or the Defeased Notematurity, as the case may be; provided that upon any defeasance and subsequent redemption that requires the payment of the Applicable Premium, the amount deposited (with respect to the Applicable Premium) shall be sufficient for purposes of the Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of deposit with the Trustee, with any Applicable Premium Deficit only required to be deposited with the Trustee on or prior to the redemption date. Any Applicable Premium Deficit shall be set forth in a certificate of an Officer of the Issuer delivered to the Trustee substantially concurrently with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption. In addition, the Issuers must comply with certain other Loan Documents conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that beneficial owners of the Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or change in applicable federal income tax law). Notwithstanding the foregoing, the Opinion of Counsel required with respect to a legal defeasance need not be delivered if all the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers. The Bank of New York Mellon Trust Company, N.A. is the Trustee under the Indenture and has been appointed by the Issuers as Registrar and a Paying Agent with regard to the Notes and has been appointed by the Issuers as the Collateral Agent with respect to the Notes. The Indenture will provide that it, the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee and the Security Agreement andNote Guarantees will be governed by, upon such assignmentand construed in accordance with, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority laws of the Successor Borrower State of New York. The Collateral Documents (including a non-consolidation opinion)other than the Mortgages) and the Intercreditor Agreement will be governed by, and construed in accordance with, the assignment and assumption laws of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerState of New York. The Mortgages will be governed by, and construed in accordance with the enforceability laws of the assignment documents and of state in which the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)applicable Premises is located.
Appears in 1 contract
Samples: Exchange Agreement (Anywhere Real Estate Group LLC)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance When the principal or Partial Defeasance redemption price (as the case may be) of, and interest on all Bonds issued hereunder have been paid, including without limitation the purchase price for Bonds tendered under Section 2.2 hereof, or provision has been made for payment of the Loan same, together with the compensation of the Trustee and all other sums payable hereunder by Borrower the Issuer, the right, title and interest of the Trustee in and to the Trust Estate and the security interests shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurthereupon cease, and (ii) in the event Trustee, on written demand of a Partial Defeasancethe Issuer, shall release this Indenture and the Individual Property proposed security interests and shall execute such documents to evidence such release as may be defeasedreasonably required by the Issuer and shall turn over to, or to such person, body or authority as may be entitled to receive the same all balances then held by the Trustee hereunder; provided, that, Borrower shall be required to defease if any payments have been received by the Loan on Trustee derived from draws by the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to Trustee under the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender Credit Facility in connection with Borrower’s giving such release, such balances shall be paid to the Credit Facility Issuer to the extent of such notice payments. If payment or provision therefor is made with respect to less than all of the Bonds, the particular Bonds (or portion thereof) for which provision for payment shall have been considered made shall be selected by lot by the Trustee and revocation,thereupon the Trustee shall take similar action for the release of this Indenture with respect to such Bonds. Notwithstanding anything to the contrary contained herein, Bonds purchased at the option of the owners thereof with moneys held by the Trustee pursuant to this Article 14 shall not be remarketed but shall be canceled by the Trustee. PROVIDED, HOWEVER, THE BONDS ARE NOT SUBJECT TO DEFEASANCE UNDER ARTICLE 14 WHILE THE BONDS BEAR INTEREST AT THE VARIABLE RATE.
(b) Provision for the payment of Bonds shall be deemed to have been made when the Trustee holds in the Bond Fund, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment provided that if a Credit Facility is then held by the Trustee, such moneys shall constitute Available Moneys or (2) noncallable Governmental Obligations maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys without reinvestment to make such payment; provided that if a Credit Facility is then held by the Trustee, such Governmental Obligations shall have been on deposit with the Trustee in a separate and segregated account for a period of one hundred twenty- seven (127) days during and prior to which no Event of Bankruptcy has occurred or which Governmental Obligations were purchased with Available Moneys.
(c) Borrower No Bonds in respect of which a deposit under subsection (b) above has been made shall be deemed paid within the meaning of this Article unless the Trustee is satisfied that the amounts deposited are sufficient to make all payments that might become due on the Bonds, including purchase price payments for Bonds tendered at the option of the owners or purchased by the Issuer in lieu of redemption, if any. Notwithstanding the foregoing, no delivery to the Trustee under this subsection (c) shall be deemed a payment of any Bonds which are to be redeemed prior to their stated maturity until such Bonds shall have paid been irrevocably called or designated for redemption on a date thereafter on which such Bonds may be redeemed in accordance with the provisions of this Indenture or the Issuer shall have given the Trustee, in form satisfactory to Lender all the Trustee, irrevocable instructions to give notice of redemption. Neither the obligations nor moneys deposited with the Trustee pursuant to this Section shall be withdrawn or used for any purpose other than, and shall be segregated and held in trust for, the payment of the principal of, redemption price of, purchase price if applicable of, and interest accrued and unpaid on the Principal Indebtedness Bonds with respect to which such deposit has been made. In the event that such moneys or obligations are to be applied to the payment of principal or redemption price of any Bonds more than sixty (60) days following the deposit thereof with the Trustee, the Trustee shall mail a notice stating that such moneys or obligations have been deposited and including identifying the Defeasance Release Date,Bonds for the payment of which such moneys or obligations are being held to all owners of such Bonds at their addresses shown on the Bond Register.
(d) Borrower shall pay Anything in Article 14 to Lender all reasonable out-of-pocket fees and expenses associated the contrary notwithstanding, if moneys or Governmental Obligations have been deposited or set aside with the Full Defeasance Trustee pursuant to this Article for the payment of the principal or Partial Defeasanceredemption price, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (including purchase price if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, of the Bonds and all other sums then due the interest thereon and payable under such moneys or Governmental Obligations do not constitute Available Moneys, no amendment to the Loan Documents,provisions of this Article shall be made without the consent of the owner of each of the Bonds affected thereby.
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with Notwithstanding the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal those provisions relating to the then outstanding principal balance purchase of Bonds upon the demand of any Bondholders, the maturity of Bonds, interest payments and dates thereof, and the dates, premiums and notice requirements for optional and mandatory redemption or purchase and the Trustee's remedies with respect thereto, and provisions relating to exchange, transfer and registration of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non- presentment of Bonds, the holding of moneys in trust and repayments to the Issuer or the Credit Facility Issuer from the Bond Fund and the duties of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed Trustee in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements foregoing and the fees, expenses and indemnities of this Section 2.10,
(h) In the case of a Partial DefeasanceTrustee, shall remain in effect and shall be binding upon the Trustee, the Debt Service Coverage Ratio with respect to Issuer and the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, Bondholders notwithstanding the release and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case discharge of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Indenture.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at any time to defease all (a) During the period commencing on the first date (the "First Defeasance Date") after the earlier of three years following the date hereof or any portion two years after the date of the Loan except a Secondary Market Transaction (as expressly defined in Paragraph 19(b)) and provided in this Section 2.10. Provided that no Event of Default has occurred and is continuingexists, after Mortgagor may obtain the date which is two (2) years after the Start-Up Day release of the last Note securitized, Borrower may voluntarily defease all Mortgaged Property from the lien of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to this Mortgage upon the satisfaction of the following conditions precedent:
(ai) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen thirty (1530) days prior written notice is given to Lender Mortgagee specifying (i) a Payment Date the date (the “Defeasance "Release Date”") on which the Full Defeasance or Partial Defeasance Deposit (hereinafter defined) is to occur, and be made;
(ii) in the event payment to Mortgagee of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness principal balance of the Note to and including the Defeasance Release Date,
(d) Borrower ; provided that if the Release Date is other than a regularly scheduled payment date on the Note, Mortgagor shall also pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less Mortgagee the amount of interest that would have accrued on the Defeased Note from the Release Date to and including the day immediately preceding the next regularly scheduled payment date on the Note;
(iii) the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical payment to the terms Mortgagee of all other sums, not including scheduled interest or principal payments, due under the Note, except for this Mortgage, the principal balance Assignment, and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean and including the Undefeased Note, unless expressly provided otherwise,Release Date;
(giv) Borrower shall deliver the payment to Lender Mortgagee of the following itemsDefeasance Deposit;
(v) the delivery to Mortgagee of:
(iA) a security agreement, in form fowl and substance satisfying the Prudent Lender Standardreasonably satisfactory to Mortgagee, creating a first priority perfected Lien lien on the Defeasance Deposit and the U.S. Obligations (hereinafter defined) purchased on behalf of Mortgagor with the Defeasance Collateral Deposit in accordance with this provision of this paragraph (the “"Security Agreement”"),;
(iiB) for execution by Lender, a release of each applicable Individual the Mortgaged Property being defeased from the lien of the applicable this Mortgage (for execution by Mortgagee) in a form faun appropriate for the jurisdiction in which such Individual the Mortgaged Property is located,;
(iiiC) an Officer’s Certificate officer's certificate of Borrower Mortgagor certifying that the requirements set forth in this Section 2.10 Subparagraph (a) have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivD) an opinion of counsel for Mortgagor in form faint and substance satisfying the Prudent Lender Standard and delivered by counsel reasonably satisfactory to Mortgagee stating, among other things, things (Ax) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender that Mortgagee has a perfected first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien the U.S. Obligations purchased by Mortgagee on the Defeasance Collateral and the Proceeds thereof and behalf of Mortgagor, (By) that the subject Partial Defeasance Security Agreement is enforceable against Mortgagor in accordance with its terms and (z) that the defeasance will not adversely affect cause any trust to fail to qualify as a REMIC;
(E) evidence in writing from the status applicable Rating Agencies to the effect that such release will not result in a re-qualification, reduction or withdrawal of any REMIC formed rating in effect immediately prior to such defeasance for any securities issued in connection with a Secondary Market Transaction, ; and
(vF) such other certificates, opinions, documents or instruments as Lender Mortgagee may reasonably request includingrequest; and.
(vi) no Event of Default exists. In connection with the conditions set forth in Subparagraph 11(a)(v) above, without limitationMortgagor hereby appoints Mortgagee as its agent and attorney-in-fact for the purpose of using the Defeasance Deposit to purchase U.S. Obligations identified for Mortgagee by Mortgagor or Mortgagor's agent (other than Mortgagee) and which provide payments on or prior to, but as close as possible to, all successive scheduled payment dates after the Release Date upon which interest and principal payments are required under the Note (Aincluding the amounts due on the Maturity Date) written confirmation and in amounts equal to the scheduled payments due on such dates under the Note (the "Scheduled Defeasance Payments"). Mortgagor, pursuant to the Security Agreement or other appropriate document, shall authorize and direct that the payments received from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency U.S. Obligations may be made directly to withdraw, qualify or downgrade Mortgagee and applied to satisfy the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that obligations of Mortgagor under the Defeasance Collateral complies with all of the requirements of this Section 2.10,Note.
(hb) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10Paragraph 11, the Individual Mortgaged Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable this Mortgage, the Guaranty shall be released and the pledged U.S. Obligations shall thereafter no longer be subject the sole source of collateral securing the Note. Any portion of the Defeasance Deposit in excess of the amount necessary to restrictions purchase the U.S. Obligations required by Subparagraph (a) above to satisfy Mortgagor's obligations under this Paragraph (and any other deposits, impounds, or reserves of Mortgagor held by or on transfer set forth hereinaccount of Mortgagee under this Mortgage) shall be remitted to Mortgagor with the release of the Mortgaged Property from the lien of this Mortgage. In connection with such release, Mortgagee shall establish or designate a defeasance of the Loan, Borrower shall assign to an entity, which successor entity which shall be a Special-Purpose Entity (the “"Successor Obligor”)Mort2agor") and Mortgagor shall transfer and assign all obligations, all of Borrower’s rights and duties under and to the Note together with the pledged U.S. Obligations to such Successor Mortgagor. Such Successor Mortgagor shall assume the obligations under the Full Defeased Note and the Security Agreement and Mortgagor and Guarantor shall be relieved of their respective obligations thereunder (but in each instance only as to acts or Defeased Noteevents occurring, or obligations arising, after consummation of the defeasance provided for in this Paragraph). The Mortgagor shall pay $1,000.00 to any such Successor Mortgagor as consideration for assuming the case may be, obligations under the other Loan Documents Note and the Security Agreement. Notwithstanding anything in this Mortgage to the contrary, together with the pledged Defeasance Collateral. The Successor Obligor no other assumption fee shall assume, in be payable upon a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority transfer of the Successor Borrower (including a non-consolidation opinion)Note in accordance with this paragraph, the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower but Mortgagor shall pay all out-of-pocket costs and expenses incurred by LenderMortgagee, including Lender’s Mortgagee's reasonable attorney’s out-of-pocket attorneys' fees and expenses, incurred in connection with Successor Borrower’s assumption this Paragraph 11.
(c) For purposes of this Paragraph 11, the following terms shall have the following meanings:
(i) The term "Defeasance Deposit" shall mean an amount equal to the sum of one-hundred percent (100%) of the Loanentire unpaid principal balance of the Note, the Security Agreement Yield Maintenance Premium, any reasonable out-of-pocket costs and expenses incurred or to be incurred in the purchase of U.S. Obligations necessary to meet the Scheduled Defeasance Collateral. Nothing Payments and any revenue, documentary stamp or intangible taxes or any other tax or charge due in connection with the transfer of the Note or otherwise required to accomplish the agreements of this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).paragraph;
Appears in 1 contract
Samples: Mortgage Agreement (American Realty Capital Healthcare Trust Inc)
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 12.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 12.12(a) and (c), Borrower shall not be permitted at any time will have the right to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two whole (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion and obtain the release of the Loan (a “Partial Defeasance”), in either case, subject to Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions precedentconditions:
(a) Any Full Borrower will not have the right to obtain Defeasance or Partial Defeasance at any of the following times:
(i) If the Loan by Borrower shall be made on is not assigned to a Payment Date,REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
(b) Borrower shall provide not less than fifteen will give Lender Notice (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Full Defeasance. The Defeasance or Partial Defeasance is to occurClosing Date specified by Borrower may not be more than 60 calendar days, and (ii) in nor less than 30 calendar days, after the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan date on which Lender receives the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower prior to of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with identity of the accommodation borrower (“Successor Borrower’s giving of such notice and revocation,”).
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the The Defeasance Release Date,
Notice must be accompanied by a $10,000 non-refundable fee (d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full “Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased NoteFee”). The Defeased Note and If Lender does not receive the Undefeased Note shall have terms identical Defeasance Fee, then Borrower’s right to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents obtain Defeasance pursuant to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:that Defeasance Notice will terminate.
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on If Borrower timely pays the Defeasance Deposit and Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Collateral (the “Security Agreement”Fee as liquidated damages for Borrower’s default and, except as provided in Section 12.12(d)(ii),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s further obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)12.
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Samples: Seniors Housing Loan and Security Agreement (NorthStar Healthcare Income, Inc.)
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is continuingremain uncured, Borrowers shall have the right at any time after the date which is two (2) years after Defeasance Lockout Release Date and prior to the Start-Up Day Open Period Start Date to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(ai) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower Borrowers shall provide Lender not less than fifteen thirty (1530) days prior written days’ notice to (or such shorter period of time if permitted by Lender in its sole discretion) but not more than ninety (90) days’ notice specifying (i) a Payment Date date (the “Total Defeasance Release Date”) on which the Full Total Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower Borrowers shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid pay to Lender (A) all payments of principal and interest accrued due and unpaid payable on the Principal Indebtedness Loan to and including the Total Defeasance Release Date (provided that, if such Total Defeasance Date is not a Monthly Payment Date,
(d) Borrower , Borrowers shall also pay to Lender all payments of principal and interest due on the Loan to and including the next occurring Monthly Payment Date); (B) all other sums, if any, then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, appraisal, Rating Agency and other reasonable out-of-pocket fees fees, costs and expenses associated with the Full Defeasance paid or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred by Lender or its agents in connection with the delivery Total Defeasance Event, the release of opinion letters the lien of Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement and related to such Full Defeasance documentation; and (D) any revenue, documentary stamp, intangible or Partial Defeasanceother taxes, as applicable), reasonable charges or fees and out-of-pocket costs of any loan servicer (if any) due in connection with the Full transfer or assumption of the Note and/or the Total Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,Event.
(eiii) Borrower Borrowers shall either deposit with Lender an amount equal to the Total Defeasance Collateral into the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower Borrowers shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Total Defeasance Collateral;
(gv) Borrower Borrowers shall deliver to Lender the following items:
an opinion of counsel for Borrowers that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (iA) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) if a Securitization has occurred (1) the REMIC Trust formed pursuant to such Securitization and/or any subsequent or prior Securitization of the Loan or any portion thereof or interest therein will each not fail to maintain their respective status as a “Security Agreement”),real estate mortgage investment conduit” within the meaning of Section 860D of the IRS Code as a result of a Total Defeasance Event pursuant to this Section 2.8 and (2) the Total Defeasance Event would not (I) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.1001-3 or (II) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the IRS Code; and (C) the Total Defeasance Event will not result in a deemed exchange for purposes of the IRS Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes; and (D) a New Non-Consolidation Opinion with respect to the Successor Borrower;
(iivi) for execution by Lender, Borrowers shall deliver to Lender a release of each applicable Individual Property being defeased from Rating Agency Confirmation as to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,Total Defeasance Event;
(iiivii) Borrowers shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied satisfied;
(viii) Borrowers shall deliver a certificate of an Approved Account Firm certifying that the Total Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(ix) Each Borrower shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request; and
(x) Borrowers shall pay all Rating Agency fees and expenses and all other reasonable out-of-pocket costs and expenses of Lender incurred in connection with the Total Defeasance Event, including, without limitation, that no Event of Default has occurred Lender’s reasonable attorneys’ fees and is continuing,expenses.
(ivb) an opinion of counsel in form If Borrowers have elected to defease the entire Note and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall thereafter no longer be subject to restrictions on transfer set forth hereinthe sole source of collateral securing the Note. In connection with a defeasance the release of the Loanlien, Borrower Borrowers shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Total Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a release of lien (and related Loan Documents) for execution by Lender. Such release shall be in a Special-Purpose Entity (form appropriate in the “Successor Obligor”)jurisdiction in which the Property is located and shall contain standard provisions protecting the rights of the releasing lender. In addition, Borrowers shall provide all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreementdocumentation Lender reasonably requires to be delivered by Borrowers in connection with such release, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, an Officer’s Certificate certifying that such documentation (i) is in a writing or writings satisfying the Prudent Lender Standard, compliance with all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerApplicable Law, and (ii) will affect such release in accordance with the enforceability terms of the assignment documents and of the Loan Documents as the obligation of Successor Borrowerthis Agreement. Borrower Borrowers shall pay all out-of-pocket costs costs, taxes and expenses incurred by Lenderassociated with the release of the lien of the Security Instrument, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)attorneys’ fees.
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Defeasance. Borrower shall not be permitted 18.2.1 The Issuer may, at its option and at any time time, elect to defease all or any portion have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Covenant Defeasance”);
(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Loan except Bondholders cash or government obligations accepted by the Bond Trustee (the “Defeasance Pledge”) in such amounts as expressly provided will be sufficient for the payment of principal (including if applicable premium payable upon exercise of a call option) and interest on the Outstanding Bonds to Maturity Date (or redemption upon exercise of a notified call option);
(b) the Issuer shall, if required by the Bond Trustee, provide a legal opinion reasonable acceptable to the Bond Trustee to the effect that the Bondholders will not recognize income, gain or loss for Norwegian income tax purposes as a result of the Defeasance Pledge and Covenant Defeasance, and will be subject to such income tax on the same amount and in this Section 2.10. Provided that the same manner and at the same times as would have been the case if the Defeasance Pledge had not occurred;
(c) no Event of Default has shall have occurred and is continuingbe continuing on the date of establishment of the Defeasance Pledge, or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 181st day after the date which is two of establishment of the pledge,
(2d) years neither the Defeasance Pledge nor the Covenant Defeasance results in a breach or violation of any material agreement or instrument binding upon the Issuer, or the articles of association or other corporate documents of the Issuer;
(e) the Issuer shall have delivered to the Bond Trustee a certificate signed by its Chief Executive Officer or another authorized representative that the Defeasance Pledge was not made by the Issuer with the intent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others;
(f) the Issuer shall have delivered to the Bond Trustee any certificate or legal opinion reasonably required regarding the Covenant Defeasance or Defeasance Pledge (including certificate from its Chief Executive Officer or another authorized representative and a legal opinion from its legal counsel to the effect that all conditions for Covenant Defeasance have been complied with; and that the Defeasance Pledge (i) will not be subject to any rights of creditors of the Issuer, (ii) will constitute a valid, perfected and enforceable security interest in favour of the Bond Trustee for the benefit of the Bondholders, and (iii) after the Start-Up Day of 181st day following the last Note securitizedestablishment, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, funds and assets so pledged will not be subject to the satisfaction effects of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally under the laws of the following conditions precedentjurisdiction where 1) the Defeasance Pledge was established and 2) the corporate domicile of the Issuer.
18.2.2 Upon the exercise by the Issuer of its option under Clause 18.2.1:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower Issuer shall be made on a Payment Date,released from its obligations under all provisions in Clause 13, except 13.2.1 (a), (e), (h) and (i).
(b) Borrower the Issuer shall provide not less than fifteen (15and shall ensure that all Group Companies shall not) days prior written notice take any actions that may cause the value of the security interest created by this Covenant Defeasance to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurbe reduced, and (ii) in shall at the event request of a Partial Defeasancethe Bond Trustee execute, the Individual Property proposed or cause to be defeased; providedexecuted, thatsuch further documentation and perform such other acts as the Bond Trustee may reasonably require in order for the security interests to remain valid, Borrower shall be required to defease enforceable and perfected by the Loan on Bond Trustee for the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to account of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Bondholders;
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including any security interests other than the Defeasance Release Date,Pledge shall be discharged, and the Bond Trustee shall take all steps reasonably possible for it to cause such discharge to be effected, by way of deletion of the relevant security document from the relevant register, notice to third parties or as otherwise required;
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under provisions of the Loan Documents,Bond Agreement shall remain fully in force without any modifications.
(e) Borrower shall either deposit with Lender an amount equal to 18.2.3 All amounts covered by the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” Pledge shall be deemed to mean applied by the Undefeased NoteBond Trustee, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements provisions of this Section 2.10Bond Agreement, to the Individual Property which is payment to the subject Bondholders of such Full Defeasance or Partial Defeasance all sums due to them under this Bond Agreement on the due date thereof. Any funds and interest thereon not required for the payment of principal, premium and interest to the Bondholders (including any expenses, fees etc. due to the Bond Trustee hereunder) shall be released from returned to the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Issuer.
Appears in 1 contract
Defeasance. Borrower shall With respect to any Mortgage Loan that contains a provision for any defeasance of mortgage collateral (a "Defeasance Loan"), the related Mortgage Note, Mortgage or other related Loan Document contained in the Mortgage File, provides that the defeasance option is not be permitted exercisable prior to a date that is at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is least two (2) years after following the Start-Up Day Closing Date and is otherwise in compliance with applicable statutes, rules and regulations governing REMICs; requires prior written notice to the holder of the last Note securitized, Borrower may voluntarily defease all Mortgage Loan of the exercise of the defeasance option and payment by Mortgagor of all related fees, costs and expenses as set forth below; requires, or permits the lender to require, the Mortgage Loan (or the portion thereof being defeased) to be assumed by a “Full Defeasance”single-purpose entity; and requires delivery of a legal opinion that the Trustee has a perfected security interest in such collateral prior to any other claim or interest. In addition, each Mortgage loan that is a Defeasance Loan permits defeasance only with substitute collateral constituting "government securities" within the meaning of Treas. Reg. Section 1.860G-2(a)(8)(i) in an amount sufficient to make all scheduled payments under the Mortgage Note (or a the portion thereof being defeased) when due, and in the case of ARD Loans, assuming the Anticipated Repayment Date is the Stated Maturity Date. Further, the Mortgage or other related Loan Document contained in the Mortgage File requires that an independent certified public accountant certify that such government securities are sufficient to make all such scheduled payments when due. To Seller's actual knowledge, defeasance under the Mortgage Loan is only for the purpose of facilitating the release of the Mortgaged Property and not as a part of an arrangement to collateralize a REMIC with obligations that are not real estate mortgages. With respect to each Defeasance Loan, the related Mortgage or other related Loan Document provides that the related Mortgagor shall (a “Partial Defeasance”or permits the mortgagee to require the Mortgagor to), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance pay all Rating Agency fees associated with defeasance (if Rating Agency approval is a specific condition precedent thereto) and all other reasonable expenses associated with defeasance, including, but not limited to, accountant's fees and opinions of counsel, or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents opinions reasonably required by Lender (i) the mortgagee under the related Loan Documents, including, if applicable, a REMIC opinion and a perfection opinion and any applicable rating agency letters confirming no downgrade or qualification of ratings on any classes in the case of a Full Defeasancetransaction. Additionally, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the for any Mortgage Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the thenCut-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be off Date Balance equal to or greater than $25,000,000, the Mortgage Loan or the related documents require (ior permit the mortgagee to require) 1.51:1.00, confirmation from the Rating Agency that exercise of the defeasance option will not cause a downgrade or withdrawal of the rating assigned to any securities backed by the Mortgage Loan and require (iior permit the mortgagee to require) the Debt Service Coverage Ratio with respect Mortgagor to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s any Rating Agency fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 1 contract
Samples: Mortgage Loan Purchase and Sale Agreement (Banc of America Commercial Mortgage Inc., Series 2006-6)
Defeasance. Borrower shall not be permitted at At any time to defease all or any portion of during the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitizedDefeasance Period, Borrower may voluntarily defease all obtain a release of the Loan (a “Full Defeasance”) or a portion Property from the lien of the Mortgage and other Loan (a “Partial Defeasance”), in either case, subject to Documents upon the satisfaction of the following conditions precedentconditions:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not Not less than fifteen thirty (1530) days days’ prior written notice shall be given to Lender specifying (i) a Payment Date date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance Deposit is to occurbe delivered;
(b) All accrued and unpaid interest on the Loan and all other sums due hereunder and under the other Loan Documents up to the Defeasance Date, and (iiincluding, without limitation, all amounts payable pursuant to Section 2.5(f) in the event of a Partial Defeasancehereof, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan paid in full on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower or prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Date;
(c) No Event of Default, shall be continuing either at the time Borrower shall have paid gives notice of the Defeasance Date to Lender all principal and interest accrued and unpaid or on the Principal Indebtedness to and including the Defeasance Release Date,;
(d) On or before the Defeasance Date, Borrower shall pay deliver (or cause to be delivered) to Lender all reasonable out-of-pocket fees and expenses associated each of the following:
(i) the Defeasance Deposit, together with the Full amount required by Section 2.5(f) hereof;
(ii) the Defeasance Security Agreement, duly executed by Borrower, together with an endorsement of the Defeasance Collateral by the holder thereof as directed by Lender (or Partial Defeasance, as applicable a written instrument of transfer in form and substance wholly satisfactory to Lender (including, without limitation, fees such instruments as may be required by the depository institution holding such securities to effectuate book-entry transfers and pledges through the book-entry facilities of Rating Agencies such institution)) sufficient so as to create a first priority security interest therein in favor of Lender in conformity with any applicable state and accountantsfederal laws governing granting of such security interests;
(iii) an opinion of counsel for Borrower, in form and substance (and delivered by counsel) satisfactory to Lender in its sole discretion stating, among other things, (w) that Lender has a perfected first priority security interest in the Defeasance Deposit and the Defeasance Collateral, (x) that the Defeasance Security Agreement is enforceable against Borrower in accordance with its terms, (y) that the Defeasance will not (1) cause the Trust to fail to qualify as a REMIC within the meaning of Section 860D of the Code as a result of such Defeasance, (2) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.1001-3(b) or cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code, (3) result in a deemed exchange for purposes of the Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes, and fees incurred (4) constitute an avoidable preference under Section 547 of the Bankruptcy Code, or similar provisions of any applicable state law, and (z) if a Non-Consolidation Opinion was delivered in connection with the delivery closing of opinion letters related the Loan, setting forth such comparable opinions as to such Full Defeasance Successor Borrower as Lender shall reasonably require (or Partial Defeasance, as applicableshall be required to satisfy the Securitization Documents), reasonable fees and out-of-pocket costs ;
(iv) a Rating Confirmation from each of the applicable Rating Agencies for any loan servicer (if any) securities issued in connection with a Secondary Market Transaction;
(v) a certificate in form and substance acceptable to Lender, from a nationally-recognized firm of independent certified public accountants acceptable to Lender and satisfying the Full requirements of the Securitization Documents, certifying that the Defeasance Collateral is sufficient to generate monthly amounts equal to or Partial Defeasancegreater than the payments due on all successive Payment Dates occurring after the Defeasance Date through and including the Maturity Date, with each such payment being equal to or greater than (1) the Monthly Payment Amount due on such Payment Date, and (2) with respect to the payment due on the Maturity Date, the entire outstanding principal balance of the Loan together with any interest accrued as applicable, of such date and all other sums then due and amounts payable under pursuant to the Loan Documents on such date;
(vi) if required to comply with the requirements of any Securitization Documents,, a certification of Borrower and Guarantor that the purpose of the defeasance is to facilitate the disposition of the Property, the refinancing of the Property or any other customary commercial transaction, and is not part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages; and
(vii) such other certificates, opinions, documents or instruments as Lender may reasonably require to satisfy any conditions of the Securitization Documents.
(e) As part of the Defeasance, Borrower shall either deposit with Lender an amount equal assign all its obligations and rights in, to and under the Note, the Defeasance Deposit, or, at Lender’s request, deliver Collateral and the Defeasance Security Agreement to a successor entity acceptable to Lender (“Successor Borrower”). In connection therewith, the Successor Borrower shall execute an assumption agreement in form and substance satisfactory to Lender in its sole discretion pursuant to which it shall assume Borrower’s obligations under the Note and the Defeasance Security Agreement and accept an assignment of the Defeasance Collateral. In connection with the foregoingsuch assignment and assumption, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) and/or Successor Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent and delivered by counsel satisfactory to Lender Standard in its sole discretion stating, among other things, (A) thatthat such assumption agreement is enforceable against Borrower and Successor Borrower, as applicable, in accordance with its terms and that the Note, the Defeasance Collateral has been duly Security Agreement and validly assigned any other documents executed in connection with such defeasance are enforceable against Borrower or Successor Borrower, as applicable, in accordance with their respective terms.
(f) Borrower shall pay, simultaneously with the Defeasance of the Loan as aforesaid, all reasonable costs and delivered to expenses incurred by Lender and Lender has a first priority perfected security interest Successor Borrower and their respective agents and servicers in satisfying the foregoing conditions and Lien on of the transactions contemplated by this Section 2.5, including, without limitation, the reasonable and customary brokerage or other transaction fees in purchasing the Defeasance Deposit Collateral, any reasonable legal fees and a first priority perfected security interest expenses incurred in connection with obtaining and Lien on reviewing the Defeasance Collateral and the Proceeds thereof preparation of the Defeasance Security Agreement and (B) that related documentation and confirming the subject Partial Defeasance will not adversely affect satisfaction of the status other conditions to the Defeasance, and the cost of any REMIC formed in connection with a Secondary Market Transaction, andRating Confirmation.
(vg) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies Upon compliance with all of the foregoing requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.5, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00Borrower and Guarantor shall be relieved of their respective obligations under the Note and the Defeasance Security Agreement and the other Loan Documents (except to the extent such obligations survive any repayment or defeasance of the Loan), and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Mortgage and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents Documents, and (iii) the Security AgreementDefeasance Collateral shall constitute the only collateral which shall secure the Note. Lender will, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of at Borrower’s obligations under expense, execute and deliver any agreements reasonably requested by Borrower to release the Full Defeased Note Property from such liens.
(h) The entity initially named herein as “Lender” shall have the sole right to (i) establish or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of designate the Successor Borrower and (including a non-consolidation opinion), ii) purchase or cause the assignment and assumption purchase of the Loan, the Security Agreement and the Defeasance Collateral between Borrower with the Defeasance Deposit, which rights (collectively, the “Defeasance Rights”) may be exercised in Lender’s sole discretion and Successor Borrower, and the enforceability of the assignment documents and shall be retained by such entity initially named herein as “Lender” notwithstanding any transfer or securitization of the Loan Documents as unless such Defeasance Rights are expressly conveyed together therewith; the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of Defeasance Rights may be conveyed separately from the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F).
Appears in 1 contract
Defeasance. This Section 10.27 will apply only if the Note provides for the option to defease the Loan (“Defeasance”) and the Note is assigned to a REMIC trust prior to the Cut-off Date.
(a) Borrower shall will not have the right to obtain a Defeasance at any of the following times:
(i) If the Loan is not assigned to a REMIC trust.
(ii) During the Lockout Period.
(iii) After the expiration of the Defeasance Period.
(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 5 of the Note.
(b) If the Note provides for Defeasance and it is assigned to a REMIC trust prior to the Cut-off Date, then, subject to Sections 10.27(a), 10.27(e), and 10.27(f) of this Loan Agreement, Borrower will have the right to a Defeasance and to obtain the release of the Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions:
(i) Borrower will give Lender Notice (“Defeasance Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be permitted at any time to defease all or any portion more than 60 calendar days, nor less than 30 calendar days, after the date on which Lender receives the Defeasance Notice. Lender will acknowledge receipt of the Loan except as expressly provided in this Section 2.10Defeasance Notice and will notify Borrower of the identity of the accommodation borrower (“Successor Borrower”).
(ii) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”) for Lender’s processing of the Defeasance. Provided If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that no Defeasance Notice will terminate.
(iii) No Event of Default has occurred and is continuing.
(iv) Borrower delivers each of the following documents to Lender, after in form and substance satisfactory to Lender, on or prior to the date which is two Defeasance Closing Date, unless Lender has issued a written waiver of its right to receive any such document:
(A) One or more opinions of counsel for Borrower confirming each of the following:
(1) Lender has a valid and perfected first Lien and first priority security interest in the Defeasance Collateral and the proceeds of the Defeasance Collateral.
(2) years after the Start-Up Day The Pledge Agreement is duly authorized, executed, delivered and enforceable against Borrower in accordance with its terms.
(3) That each of the last Note securitizedfollowing is correct:
(I) The Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, Borrower may voluntarily defease all amended or replaced from time to time).
(II) The qualification and status of the Loan REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Defeasance.
(III) That there will be no imposition of a tax under applicable REMIC provisions as a result of the Defeasance.
(4) That the Defeasance will not result in a “Full Defeasancesale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder.
(B) A written certificate from an independent certified public accounting firm acceptable to Lender, confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date.
(C) Lender’s form of a pledge and security agreement (“Pledge Agreement”) or and financing statements which pledge and create a portion first priority security interest in the Defeasance Collateral in favor of the Loan Lender.
(D) Lender’s form of a transfer and assumption agreement (“Partial DefeasanceTransfer and Assumption Agreement”), pursuant to which Borrower and any Guarantor (in either each case, subject to the satisfaction of all requirements under this Loan Agreement) will be relieved from liability in connection with the following conditions precedentLoan, subject to continuing liability under Sections 6.12 and 10.02 for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date, and Successor Borrower will assume all remaining obligations.
(E) Forms of all documents necessary to release the Mortgaged Property from the Liens created by the Security Instrument and related UCC financing statements (collectively, “Release Instruments”), each in appropriate form required by the Property Jurisdiction.
(F) Any other opinions, certificates, documents or instruments that Lender may request.
(v) Borrower will deliver to Lender, on or prior to the Defeasance Closing Date, each of the following:
(aA) Any Full The Defeasance or Partial Defeasance of Collateral, which meets all the Loan by Borrower shall be made on a Payment Date,following requirements:
(b1) Borrower shall It is owned by Borrower, free and clear of all Liens and claims of third-parties.
(2) It is in an amount sufficient to provide not less than fifteen for (15A) days prior written notice redemption payments to Lender specifying (i) a Payment Date (occur prior, but as close as possible, to all successive Installment Due Dates occurring under the “Note after the Defeasance Release Closing Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (iiB) in delivery of redemption proceeds at least equal to the event amount of principal and interest due on the Note on each Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”).
(3) All redemption payments received from the Defeasance Collateral will be paid directly to Lender to be applied on account of the Scheduled Debt Payments occurring after the Defeasance Closing Date.
(4) The pledge of the Defeasance Collateral will be effected through the book-entry facilities of a Partial Defeasancequalified securities intermediary designated by Lender in conformity with all applicable laws.
(B) All accrued and unpaid interest and all other sums due under the Note, this Loan Agreement and under the Individual Property proposed other Loan Documents, including all amounts due under Section 10.23(b)(vi), up to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Closing Date.
(vi) Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any will pay all reasonable costs and expenses incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance in full on or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal prior to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect which payment is required prior to all Lender’s issuance of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial DefeasanceRelease Instruments and whether or not Defeasance is completed. Such expenses include all fees, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees Lender and expenses, incurred its agents in connection with Successor the Defeasance (including Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described in this Loan Agreement and any related documentation, Rating Agencies’ fees, or other costs related to the Defeasance). Lender reserves the right to require that Borrower post a deposit to cover costs which Lender reasonably anticipates that Lender will incur in connection with the Defeasance.
(c) No Transfer Fee will be payable to Lender upon a Defeasance made in accordance with this Section 10.23.
(d) All payments required to be made by Borrower to Lender pursuant to this Section 10.23 will be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.
(e) If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Fee as liquidated damages for Borrower’s assumption of the Loandefault and, the Security Agreement and the Defeasance Collateral. Nothing except as provided in Section 10.23(f), Borrower will be released from all further obligations under this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)10.
Appears in 1 contract
Samples: Loan Agreement
Defeasance. Borrower shall not be permitted at (a) At any time to defease all or any portion other than during the continuance of the Loan except as expressly provided in Prepayment Period for any Series of Outstanding Notes, the Issuer may obtain the release from all covenants of this Section 2.10. Provided Indenture relating to the ownership and operation of the Tower Sites by delivering United States government securities that provide for payments equal to the Scheduled Defeasance Payments with respect to each Series of then Outstanding Notes, provided, that (i) no Event of Default has occurred and is continuing, after continuing and (ii) the Issuer shall pay or deliver on the date which is two of such defeasance (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Date”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Class Principal Indebtedness Balance of each Class of Outstanding Notes to and but not including the Defeasance Release Date (and if the Defeasance Date is not a Payment Date,
(d) Borrower shall pay , the interest that would have accrued to Lender all reasonable out-of-pocket fees and expenses associated with but not including the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicablenext Payment Date), reasonable fees and out-of-pocket costs of any loan servicer (if anyb) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver Payments with respect to Lender the Defeasance Collateraleach Series of then Outstanding Notes. In connection with addition, the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuer shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has Indenture Trustee a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on U.S. government securities so delivered by the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitationIssuer, (A2) written confirmation from an Opinion of Counsel as to the relevant Rating Agencies that enforceability and perfection of such Partial Defeasance will not cause any Rating Agency to withdrawsecurity interest, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B3) a certificate from confirmation by an Independent certified public accountant certifying accounting firm that the U.S. government securities so delivered are sufficient to pay all interest due from time to time after the Defeasance Collateral complies with Date (or if the Defeasance Date is not a Payment Date, due after the next Payment Date) through the Defeasance Payment Date and all principal on the Defeasance Payment Date, and all Indenture Trustee Fees, Workout Fees, Servicing Fees, Other Servicing Fees, and any other amounts due and owing to the Servicer, if any, and (4) a Rating Agency Confirmation. The Issuer, pursuant to the security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be made directly to the Indenture Trustee and applied to satisfy the obligations of the requirements of this Section 2.10,Issuer under the Notes and the other Transaction Documents.
(hb) In If the case of a Partial DefeasanceAsset Entities will continue to own any material assets other than the U.S. government securities delivered in connection with the defeasance, the Debt Service Coverage Ratio Issuer shall establish or designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee (with respect to the Undefeased Note shall be equal to or greater than which (i) 1.51:1.00, a substantive non-consolidation Opinion of Counsel reasonably satisfactory to the Indenture Trustee has been delivered to the Indenture Trustee and (ii) the Debt Service Coverage Ratio with respect an Opinion of Counsel reasonably satisfactory to the Loan for Indenture Trustee has been delivered to the trailing twelve Indenture Trustee that the Issuer will not be required to register as an investment company under the Investment Company Act), and to transfer to that entity the pledged U.S. government securities. The new entity shall assume the obligations of the Issuer under the Notes being defeased and the security agreement and the Obligors and the Guarantor shall be relieved of their obligations in respect thereof under the Transaction Documents. The Issuer shall pay Ten Dollars (12$10) months immediately prior to such Partial Defeasance, andnew entity as consideration for assuming such obligations.
(ic) In If the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with Issuer satisfies the requirements of this Section 2.102.11(a) to defease the Notes, the Individual Property which is Indenture Trustee shall promptly execute, acknowledge and deliver to the subject of such Full Defeasance or Partial Defeasance shall be released from the lien Obligors a release of the Collateral under the applicable MortgageTransaction Documents in recordable form to the extent applicable for such release; provided that the Obligors shall, at their sole expense, prepare any and all documents and instruments necessary to effect such release, all of which shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance the reasonable approval of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerIndenture Trustee, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower Obligors shall pay all out-of-pocket costs and expenses reasonably incurred by Lenderthe Indenture Trustee (including, including Lender’s but not limited to, reasonable attorney’s attorneys’ fees and expensesdisbursements, incurred title search costs or endorsement premiums) in connection with Successor Borrower’s assumption the review, execution and delivery of the Loan, the Security Agreement documents and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating instruments necessary to any environmental matters arising under Section 5.1(F)effect such release.
Appears in 1 contract
Samples: Indenture (American Tower Corp /Ma/)
Defeasance. Borrower shall not be permitted at (a) At any time prior to defease all or any portion the Payment Date that is twelve (12) months prior to the Anticipated Repayment Date of the Loan except as expressly outstanding Series of Notes with the latest Anticipated Repayment Date (such Payment Date, the “Defeasance Payment Date”), the Issuer may obtain the release from all covenants of this Indenture by delivering United States government securities that provide for payments on each Payment Date which replicate the required payments and scheduled Class A Targeted Amortization Amount payments due under the Transaction Documents with respect to all of the Notes then outstanding, including the Indenture Trustee Fee and any other amounts due and owing to the Indenture Trustee and the Backup Manager, Workout Fees, Servicing Fees, Other Servicing Fees and any other amounts due and owing to the Servicer, if any, through the Defeasance Payment Date for each Series of Notes (including payment in full of the principal of the Notes on the related Defeasance Payment Date); provided in this Section 2.10. Provided that (i) prior to such Defeasance no Event of Default has occurred and is continuing, after continuing and (ii) the Issuer shall pay or deliver on the date which is two of such defeasance (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Date”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Outstanding Class Principal Indebtedness Balance of each Class of Notes to and but not including the Defeasance Release Date (and, if the Defeasance Date is not a Payment Date,
(d) Borrower shall pay , the interest that would have accrued to Lender all reasonable out-of-pocket fees and expenses associated with but not including the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicablenext Payment Date), reasonable fees and out-of-pocket costs of any loan servicer (if anyb) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance CollateralPayments. In connection with addition, the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuer shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has Indenture Trustee a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on U.S. government securities so delivered by the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitationIssuer, (A2) written confirmation from an Opinion of Counsel as to the relevant Rating Agencies that enforceability and perfection of such Partial Defeasance will not cause any Rating Agency to withdrawsecurity interest, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B3) a certificate from confirmation by an Independent certified public accountant certifying accounting firm that the U.S. government securities so delivered are sufficient to pay all interest due from time to time after the Defeasance Collateral complies with Date (or if the Defeasance Date is not a Payment Date, due after the next Payment Date) and all principal due upon maturity for each Class of Notes, and all Indenture Trustee Fee and Workout Fees, if any and (4) a Rating Agency Confirmation. The Issuer, pursuant to the security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be made directly to the Indenture Trustee and applied to satisfy the obligations of the requirements of this Section 2.10,Issuer under the Notes and the other Transaction Documents.
(hb) In If the case of a Partial DefeasanceAsset Entities will continue to own any material assets other than the U.S. government securities delivered in connection with the defeasance, the Debt Service Coverage Ratio Issuer shall establish or designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee, with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect which a substantive non-consolidation Opinion of Counsel reasonably satisfactory to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect Indenture Trustee has been delivered to the Individual Properties securing Indenture Trustee and to transfer to that entity the Undefeased Note pledged U.S. government securities. The new entity shall be equal to or greater than (i) RevPAR with respect to all assume the obligations of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations Issuer under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents Notes being defeased and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents security agreement and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, Obligors and the Guarantor shall be relieved of its their obligations hereunderin respect thereof under the Transaction Documents. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition The Issuer shall pay Ten Dollars ($10) to such defeasance, new entity as consideration for assuming such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)obligations.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at (a) At any time prior to defease all or any portion the last day of the Loan except as expressly provided Prepayment Consideration Period for any Outstanding Series of Term Notes with the latest Anticipated Repayment Date (such Payment Date, the “Defeasance Payment Date”), the Issuer may obtain the release from all covenants of this Base Indenture relating to ownership and operation of the Network Assets by delivering United States government securities that provide for payments on each Payment Date which replicate the required payments (including any Targeted Amortization Amounts) due under the Transaction Documents with respect to all of the Notes then Outstanding, including the Indenture Trustee Fee and any other amounts due and owing to the Indenture Trustee (in this Section 2.10. Provided any of its capacities), Servicing Fees, Other Servicing Fees and any other amounts due and owing to the Servicer, [***] and any other amounts due and owing to any [***], Workout Fees, the Back-Up Manager Fee and any other amounts due and owing to the Back-Up Manager, if any, through the Defeasance Payment Date for each Series of Notes (including payment in full of the principal of the Notes on the related Defeasance Payment Date); provided, that (i) no Event of Default has occurred and is continuing, after ; (ii) the Issuer shall pay or deliver on the date which is two of such defeasance (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceDefeasance Date”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Outstanding Class Principal Indebtedness Balance of each Class of Notes to and but not including the Defeasance Release Date (and, if the Defeasance Date is not a Payment Date,
(d) Borrower shall pay , the interest that would have accrued to Lender all reasonable out-of-pocket fees and expenses associated with but not including the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicablenext Payment Date), reasonable fees and out-of-pocket costs of any loan servicer (if anyb) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due under each Class of Notes and payable under the Loan Documents,
all other Transaction Documents executed in connection therewith, including any costs incurred in connection with such defeasance, and (ec) Borrower shall either deposit with Lender an amount U.S. government securities providing for payments equal to the Scheduled Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”)Payments; and (Biii) the other promissory note having a principal balance equal notice shall have been delivered to the Allocated Loan Amounts of all Individual Properties (including [***]. In addition, the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower Issuer shall deliver to Lender the following items:
Servicer on behalf of the Indenture Trustee (i1) a security agreement, in form and substance satisfying agreement granting the Prudent Lender Standard, creating a first priority perfected Lien Indenture Trustee on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien behalf of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has Secured Parties a first priority perfected security interest in the U.S. government securities so delivered by the Issuer, (2) an Opinion of Counsel as to the enforceability and Lien on the Defeasance Deposit and a first priority perfected perfection of such security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B3) a certificate from confirmation by an Independent certified public accountant certifying accounting firm that the U.S. government securities so delivered are sufficient to pay all interest due from time to time after the Defeasance Collateral complies Date (or if the Defeasance Date is not a Payment Date, due after the next Payment Date) and all principal due upon maturity for each Class of Notes, and the Indenture Trustee Fee and any other amounts due and owing to the Indenture Trustee, Servicing Fees, Other Servicing Fees and any other amounts due and owing to the Servicer, Workout Fees, the Back-Up Manager Fee and any other amounts due and owing to the Back-Up Manager, if any. The Issuer, pursuant to the security agreement described above, shall authorize and direct that the payments received from the U.S. government securities shall be made directly to the Indenture Trustee and applied to satisfy the obligations of the Issuer under the Notes and the other Transaction Documents.
(b) If the Asset Entities will continue to own any material assets other than the U.S. government securities delivered in connection with all the defeasance, the Issuer shall establish or designate a special-purpose bankruptcy-remote successor entity acceptable to the Indenture Trustee (acting at the prior written direction of the Servicer), with respect to which a substantive non-consolidation Opinion of Counsel reasonably satisfactory to the Indenture Trustee (consistent with the prior non-consolidation Opinion of Counsel most recently delivered to the Indenture Trustee) has been delivered to the Indenture Trustee and to transfer to that entity the pledged U.S. government securities. The new entity shall assume the obligations of the Issuer under the Notes being defeased and the security agreement and the Obligors and the Guarantor shall be relieved of their obligations in respect thereof under the Transaction Documents. The Issuer shall pay Ten Dollars ($10) to such new entity as consideration for assuming such obligations.
(c) If the Issuer satisfies the requirements of this Section 2.10,
(h2.11(a) In to defease the case Notes and delivers to the Indenture Trustee an Officer’s Certificate of a Partial Defeasancethe Issuer and an Opinion of Counsel in compliance with Section 15.01, the Debt Service Coverage Ratio with respect Indenture Trustee shall promptly execute, acknowledge and deliver to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) Obligors a release of the Debt Service Coverage Ratio with respect Collateral under the applicable Transaction Documents in recordable form to the Loan extent applicable for such release; provided that the trailing twelve (12) months immediately prior Obligors shall, at their sole expense, prepare any and all documents and instruments necessary to effect such Partial Defeasancerelease, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance the reasonable approval of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor BorrowerIndenture Trustee, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower Obligors shall pay all out-of-pocket costs and expenses reasonably incurred by Lender, the Indenture Trustee (including Lender’s reasonable attorney’s attorneys’ fees and expenses, incurred disbursements) in connection with Successor Borrower’s assumption the review, execution and delivery of the Loan, the Security Agreement documents and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating instruments necessary to any environmental matters arising under Section 5.1(F)effect such release.
Appears in 1 contract
Samples: Base Indenture (Tucows Inc /Pa/)
Defeasance. Borrower shall not be permitted 18.2.1 The Issuer may, at its option and at any time time, elect to defease all or any portion have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Covenant Defeasance”);
(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Loan except Bondholders cash or government obligations accepted by the Bond Trustee (the “Defeasance Pledge”) in such amounts as expressly provided will be sufficient for the payment of principal (including if applicable premium payable upon exercise of a Call Option) and interest on the Outstanding Bonds to Maturity Date (or redemption upon a exercise of a notified Call Option);
(b) the Issuer shall, if required by the Bond Trustee, provide a legal opinion reasonable acceptable to the Bond Trustee to the effect that the Bondholders will not recognize income, gain or loss for income tax purposes (hereunder US federal or Norwegian, if applicable) as a result of the Defeasance Pledge and Covenant Defeasance, and will be subject to such income tax on the same amount and in this Section 2.10. Provided that the same manner and at the same times as would have been the case if the Defeasance Pledge had not occurred;
(c) no Event of Default has shall have occurred and is continuingbe continuing on the date of establishment of the Defeasance Pledge, or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 181st day after the date of establishment of the pledge;
(d) neither the Defeasance Pledge nor the Covenant Defeasance results in a breach or violation of any material agreement or instrument binding upon the Issuer, or the articles of association or other corporate documents governing the Issuer;
(e) the Issuer shall have delivered to the Bond Trustee a certificate signed by its Chief Executive Officer that the Defeasance Pledge was not made by the Issuer with the intent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others;
(f) the Issuer shall have delivered to the Bond Trustee any certificate or legal opinion reasonably required regarding the Covenant Defeasance or Defeasance Pledge (including certificate from its Chief Executive Officer and a legal opinion from its legal counsel to the effect that all conditions for Covenant Defeasance have been complied with; and that the Defeasance Pledge (i) will not be subject to any rights of creditors of the Issuer, (ii) will constitutes a valid, perfected and enforceable security interest in favour of the Bond Trustee for the benefit of the Bondholders, and (iii) will, after the date which is two (2) years after 181st day following the Start-Up Day of establishment, the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, funds and assets so pledged will not be subject to the satisfaction effects of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally under the laws of the following conditions precedent:jurisdiction where the Defeasance Pledge was established and the corporate domicile of the Issuer.
18.2.2 Upon the exercise by the Issuer of its option under Clause 18.2.1;
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower Issuer shall be made on a Payment Date,released from its obligations under all provisions in Clause 13, except 13.2.1 (a), (e), (h) and (i).
(b) Borrower the Issuer shall provide not less than fifteen (15and shall ensure that all Group Companies shall not) days prior written notice take any actions that may cause the value of the Security Interest created by this Covenant Defeasance to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occurbe reduced, and (ii) in shall at the event request of a Partial Defeasancethe Bond Trustee execute, the Individual Property proposed or cause to be defeased; providedexecuted, thatsuch further documentation and perform such other acts as the Bond Trustee may reasonably require in order for the Security Interests to remain valid, Borrower shall be required to defease enforceable and perfected by the Loan on Bond Trustee for the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to account of the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,Bondholders;
(c) Borrower any Guarantor(s) shall be discharged from their obligations under the Guarantee(s), and the Guarantee(s) shall cease to have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,any legal effect;
(d) Borrower any Security Interests other than the Defeasance Pledge shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountantsbe discharged, and fees incurred in connection with the delivery Bond Trustee shall take all steps reasonably possible for it to cause such discharge to be effected, by way of opinion letters related deletion of the relevant Security Document from the relevant register, notice to such Full Defeasance third parties or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,otherwise required;
(e) Borrower all other provisions of the Bond Agreement (except (a) — (c) above) shall either deposit with Lender an remain fully in force without any modifications.
18.2.3 All moneys amount equal to covered by the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” Pledge shall be deemed to mean applied by the Undefeased NoteBond Trustee, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following items:
(i) a security agreement, in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,
(iv) an opinion of counsel in form and substance satisfying the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements provisions of this Section 2.10Bond Agreement, to the Individual Property which is payment to the subject Bondholders of such Full Defeasance or Partial Defeasance all sums due to them under this Bond Agreement on the due date thereof. Any excess funds not required for the payment of principal, premium and interest to the Bondholders (including any expenses, fees etc. due to the Bond Trustee hereunder) shall be released from returned to the lien of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Issuer.
Appears in 1 contract
Defeasance. Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. (a) Provided that no Event of Default has shall have occurred and is be continuing, Borrower shall have the right at any time after the date which is two (2) years after Release Date and prior to the Start-Up Day Maturity Date to voluntarily defease the entire Loan and obtain a release of the last Note securitized, Borrower may voluntarily defease all lien of the Loan Security Instrument by providing Lender with the Total Defeasance Collateral (hereinafter, a “Full Defeasance”) or a portion of the Loan (a “Partial DefeasanceTotal Defeasance Event”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,
(bi) Borrower shall provide Lender not less than fifteen thirty (1530) days prior written notice to (or such shorter period of time if permitted by Lender in its reasonable discretion) but not more than ninety (90) days notice specifying (i) a Payment Date date (the “Total Defeasance Release Date”) on which the Full Total Defeasance or Partial Defeasance Event is to occur, and ;
(ii) in the event of a Partial Defeasance, the Individual Property proposed Unless otherwise agreed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Xxxxxx, Borrower shall pay to Lender (A) all reasonable out-of-pocket fees payments of principal and expenses associated with interest due and payable on the Full Loan to and including the Total Defeasance or Partial DefeasanceDate (provided, as applicable that, if such Total Defeasance Date is not a Monthly Payment Date, Borrower shall also pay to Lender all payments of principal and interest due on the Loan to and including the next occurring Monthly Payment Date); (includingB) all other sums, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Note, this Agreement, the Security Instrument and the other Loan Documents,Documents through and including the Total Defeasance Date (or, if the Total Defeasance Date is not a Monthly Payment Date, the next occurring Monthly Payment Date); (C) all escrow, closing, recording, legal, Rating Agency and other fees, costs and expenses paid or incurred by Lender or its agents in connection with the Total Defeasance Event, the release of the lien of Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Security Agreement, the Defeasance Collateral Account Agreement and related documentation; and (D) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of the Note or the Total Defeasance Event;
(eiii) Borrower shall either deposit with Lender an amount equal to the Total Defeasance Collateral into the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection Collateral Account and otherwise comply with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose provisions of applying the Defeasance Deposit to purchase the Defeasance Collateral,Section 2.8(d) hereof;
(fiv) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) a Security Agreement in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance respect of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note Defeasance Collateral Account and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,Total Defeasance Collateral;
(gv) Borrower shall deliver to Lender the following items:
(i) an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (A) Lender has a security agreement, in form legal and substance satisfying the Prudent Lender Standard, creating a valid perfected first priority perfected Lien on the Defeasance Deposit and security interest in the Defeasance Collateral Account and the Total Defeasance Collateral; (B) the “Security Agreement”),
Total Defeasance Event will not result in a deemed exchange for purposes of the IRS Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes; and (C) delivery of the Total Defeasance Collateral and the grant of a security interest therein to Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law; and (ii) for execution by Lender, a release of each applicable Individual Property being defeased from REMIC Opinion with respect to the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
Total Defeasance Event; and (iii) a New Non-Consolidation Opinion with respect to Successor Borrower;
(vi) Borrower shall deliver to Lender a Rating Agency Confirmation as to the Total Defeasance Event;
(vii) Borrower shall deliver an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 2.8 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivviii) an opinion Borrower shall deliver a certificate of counsel in form and substance satisfying a nationally recognized public accounting firm acceptable to Lender certifying that the Prudent Lender Standard stating, among other things, (A) that, the Total Defeasance Collateral has been duly and validly assigned and delivered will generate monthly amounts equal to Lender and Lender has a first priority perfected security interest in and Lien on or greater than the Scheduled Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, Payments; and
(vix) Borrower shall deliver such other certificates, opinions, documents or and instruments as Lender may reasonably request including, without limitation, request.
(Ab) written confirmation from If Xxxxxxxx has elected to defease the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction entire Loan and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance2.8 have been satisfied, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Security Instrument and the Total Defeasance Collateral pledged pursuant to the Security Agreement shall thereafter no longer be subject to restrictions on transfer set forth hereinthe sole source of collateral securing the Loan. In connection with a defeasance the release of the Loanlien, Borrower shall assign submit to an entityLender, which entity which not less than thirty (30) days prior to the Total Defeasance Date (or such shorter time as is acceptable to Lender in its reasonable discretion), a release of lien (and related Loan Documents) for execution by Xxxxxx. Such release shall be in a Special-Purpose Entity (form appropriate in the “Successor Obligor”)jurisdiction in which the Property is located and that contains standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreementdocumentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all Legal Requirements, and (ii) will effect such release in accordance with the pledged Defeasance Collateralterms of this Agreement. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except Except as set forth hereinin this Article 2, be relieved no repayment, prepayment or defeasance of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s all or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and any portion of the Loan Documents as shall cause, give rise to a right to require, or otherwise result in, the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption release of the Loan, lien of the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Instrument.
Appears in 1 contract
Samples: Loan Agreement (Clipper Realty Inc.)
Defeasance. (a) In the event that prior to the Optional Prepayment Date, either Borrower exercises its option to defease its Note pursuant to Section 2.6 or is obligated to make a mandatory defeasance pursuant to Section 2.7(a), such Borrower shall not be permitted at any time to defease all or any portion of the Loan except as expressly provided in this Section 2.10. Provided that no Event of Default has occurred and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of compliance with the following conditions precedent:
(ai) Any Full Defeasance or Partial Defeasance the delivery by such Borrower of the Loan by Borrower shall be made on a Payment Date,
(b) Borrower shall provide not less than fifteen (15) days 10 Business Days' prior written notice to Lender specifying (i) a regularly scheduled Payment Date (the “"Defeasance Release Date”") on which the Full Defeasance or Partial Defeasance Deposit is to occur, be made and the principal amount to be prepaid by defeasance;
(ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease the Loan on the Defeasance Release Date specified in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid payment to Lender of all scheduled interest at the Base Interest Rate and principal and interest accrued payments due and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,;
(diii) Borrower shall pay with respect to defeasance of the Loan in whole pursuant to Section 2.6 only, the payment to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasance, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the applicable Note, the Mortgages, the Second Mortgages and the other Loan Documents,;
(eiv) Borrower shall either deposit with Lender an amount equal respect to defeasance of the Defeasance DepositLoan pursuant to Section 2.7(a) only, or, at Lender’s request, deliver payment of all other amounts due under the Related Mortgages;
(v) the payment to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase on the Defeasance Collateral,Date; and
(fvi) Borrower shall execute and deliver the delivery to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue two substitute notes as follows: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount of the Defeased Note (the “Undefeased Note”). The Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Payment. Neither a Full Defeased Note nor a Defeased Note may be the subject of any further defeasance; after a Partial Defeasance, all references herein and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided otherwise,
(g) Borrower shall deliver to Lender the following itemsof:
(iA) a security agreement, in form and substance satisfying the Prudent Lender Standardreasonably satisfactory to Lender, creating a first priority perfected Lien lien on the Defeasance Deposit and the U.S. Treasuries purchased on behalf of either Borrower with the Defeasance Collateral Deposit in accordance with this provision of this Section 8.30 (the “"Security Agreement”"),;
(iiB) with respect to defeasance of the Loan in whole pursuant to Section 2.6 only, releases for each of the Individual Properties from the Liens of the Related Mortgages, the Assignments of Leases, the Second Assignments of Leases, the Assignments of Agreements, the Second Assignments of Agreements and UCC-1 financing statements (for execution by Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage ) in a form forms appropriate for the jurisdiction in which such each Individual Property is located,;
(iiiC) with respect to defeasance of the Loan pursuant to Section 2.7(a) only, the releases described in Section 2.11(a) (for execution by Lender) in forms appropriate for the jurisdiction in which the applicable Individual Property is located;
(D) an Officer’s 's Certificate of Borrower certifying that the requirements set forth in this Section 2.10 8.30 have been satisfied including, without limitation, that no Event of Default has occurred and is continuing,satisfied;
(ivE) an opinion of counsel for Borrower in form and substance satisfying the Prudent satisfactory to Lender Standard stating, among other things, that (A1) that, the Defeasance Collateral has been duly and validly assigned and delivered to Lender and Lender has a perfected first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien the U.S. Treasuries purchased by Lender on the Defeasance Collateral and the Proceeds thereof behalf of Borrower and (B2) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with pursuant to the Securitization will not fail to maintain its REMIC status for federal income tax purposes as a Secondary Market Transaction, and
result of such defeasance; and (vF) such other certificates, documents or instruments as Lender may reasonably request request, including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued those reasonably required in connection with a Securitization, including, without limitation, notice to the Rating Agencies of any Secondary Market Transaction defeasance as well as any other notice reasonably required in connection with such defeasance. In connection with the conditions set forth above, Borrower hereby appoints Lender as its agent and (B) a certificate from an Independent certified public accountant certifying attorney-in- fact for the purpose of using the Defeasance Deposit to purchase noncallable U.S. Treasuries which provide Scheduled Defeasance Payments, and Lender shall upon receipt of the Defeasance Deposit purchase such U.S. Treasuries on behalf of Borrower. Borrower, pursuant to the Security Agreement or other appropriate document, shall authorize and direct that the Defeasance Collateral complies payments received from the U.S. Treasuries shall be made directly to Lender and applied to satisfy the obligations of Borrower under the Note.
(b) With respect to defeasance of the Loan in whole pursuant to Section 2.6, upon compliance with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance8.30(a), the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00the Mortgaged Property shall be released from the liens of the Related Mortgages, the Assignments of Leases, the Second Assignments of Leases, the Assignments of Agreements, the Second Assignments of Agreement and the UCC-1 financing statements and (ii) the Debt Service Coverage Ratio with pledged U.S. Treasuries shall be the sole source of collateral securing the Note. With respect to a defeasance of the Loan for the trailing twelve (12) months immediately prior pursuant to such Partial DefeasanceSection 2.7(a), and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, and (ii) RevPAR with respect to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon upon compliance with the requirements of this Section 2.10, 8.30(a) the applicable Individual Property which is the subject of such Full Defeasance or Partial Defeasance Properties shall be released from the lien pursuant to Section 2.11(a).
(c) Any portion of the applicable Mortgage, and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance Defeasance Deposit in excess of the Loan, amount necessary to purchase the U.S. Treasuries required by Section 8.30(a) above or to satisfy the other requirements of Section 8.30(a) shall be remitted to Borrower. 106
(d) Borrower shall have the right to assign to an entityLender (or, which entity which at Lender's option, to Lender's designee or nominee) and Lender (or such designee or nominee) shall be a Special-Purpose Entity (have the “Successor Obligor”)obligation to assume, all of Borrower’s the obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower and Successor Borrower, and the enforceability of the assignment documents and of the Loan Documents as the obligation of Successor Borrower. Borrower shall pay all out-of-pocket costs and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption of the Loan, the Security Agreement and the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)the principal amount so defeased.
Appears in 1 contract
Samples: Loan Agreement (Forum Group Inc)
Defeasance. (a) On any date after the expiration of the Lockout Period subject to the notice requirement described in Section 2.1(d), Borrower may from time to time obtain the release of (x) all of the Properties from the Liens of the Loan Documents by Defeasing the entire Loan, or (y) one or more Permitted Release Parcels from the Liens of the Loan Documents by satisfying the conditions set forth in Section 2.2, and Defeasing a portion of the Loan that is not less than the sum of the Release Prices of the Permitted Release Parcels so released, provided that all sums then due to Lender under the Loan Documents are paid and the following are delivered to Lender:
(i) Defeasance Collateral sufficient to provide payments on or prior to, and in any event as close as possible to, all successive Payment Dates in an amount sufficient (x) to pay the interest and principal due on such Payment Dates in respect of a portion of the Loan equal to the amount Defeased and (y) to repay the outstanding principal balance of such portion of the Loan on the first Payment Date in the Prepayment Period or such other Payment Date in the Prepayment Period as Borrower shall elect;
(ii) written confirmation from an independent certified public accounting firm reasonably satisfactory to Lender that such Defeasance Collateral is sufficient to provide the payments described in clause (i) above;
(iii) a security agreement, in form and substance reasonably satisfactory to Lender, creating in favor of Lender a first priority perfected security interest in such Defeasance Collateral (a “Defeasance Pledge Agreement”);
(iv) an opinion of counsel for Borrower, in form and substance reasonably satisfactory to Lender and delivered by counsel reasonably satisfactory to Lender, opining that (1) the Defeasance Pledge Agreement has been duly authorized and is enforceable against Borrower in accordance with its terms and that Lender has a perfected first priority security interest in such Defeasance Collateral; (2) if the Loan has been Securitized, the Defeasance (including the assumption pursuant to Section 2.1(c)) does not cause a tax to be permitted at imposed on the Securitization Vehicle or, if the Securitization Vehicle is a REMIC, does not cause any time portion of the Loan to defease cease to be a “qualified mortgage” within the meaning of section 860G(a)(3) of the Code, and (3) the Defeasance (in the case of a partial Defeasance, with respect to both the Defeased Note and the Undefeased Note) does not constitute a “significant modification” of the Loan under Section 1001 of the Code;
(v) if all or any portion of the Loan except has been Securitized, the Rating Condition with respect to such Defeasance shall have been satisfied or deemed satisfied pursuant to the definition of “Rating Condition”;
(vi) instruments reasonably satisfactory to Lender releasing and discharging or assigning to a third party Lender’s Liens on the Collateral so released (other than the Defeasance Collateral);
(vii) such other customary certificates, opinions, documents or instruments as expressly provided Lender and the Rating Agencies may reasonably request; and
(viii) reimbursement for all actual and documented reasonable costs and expenses incurred in connection with this Section 2.102.1 (including Rating Agency and Servicer fees and expenses, reasonable fees and expenses of legal counsel and accountants and any revenue, documentary stamp or intangible taxes or any other tax or charge due in connection herewith). Provided that no Event Lender shall reasonably cooperate with Borrower to avoid the incurrence of Default has occurred mortgage recording taxes in connection with a Defeasance, at Borrower’s sole cost and is continuing, after the date which is two (2) years after the Start-Up Day of the last Note securitized, Borrower may voluntarily defease all of the Loan (a “Full Defeasance”) or a portion of the Loan (a “Partial Defeasance”), in either case, subject to the satisfaction of the following conditions precedent:
(a) Any Full Defeasance or Partial Defeasance of the Loan by Borrower shall be made on a Payment Date,expense.
(b) Borrower shall provide not less than fifteen (15) days prior written notice to Lender specifying (i) a Payment Date (the “Defeasance Release Date”) on which the Full Defeasance or Partial Defeasance is to occur, and (ii) in the event of a Partial Defeasance, the Individual Property proposed to be defeased; provided, that, Borrower shall be required to defease If the Loan on the Defeasance Release Date specified is not Defeased in such notice unless such notice is revoked in writing by Borrower prior to the such Defeasance Release Date in which event Borrower shall immediately reimburse Lender for any reasonable costs incurred by Lender in connection with Borrower’s giving of such notice and revocation,
(c) Borrower shall have paid to Lender all principal and interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date,
(d) Borrower shall pay to Lender all reasonable out-of-pocket fees and expenses associated with the Full Defeasance or Partial Defeasancefull, as applicable (including, without limitation, fees of Rating Agencies and accountants, and fees incurred in connection with the delivery of opinion letters related to such Full Defeasance or Partial Defeasance, as applicable), reasonable fees and out-of-pocket costs of any loan servicer (if any) in connection with the Full Defeasance or Partial Defeasance, as applicable, and all other sums then due and payable under the Loan Documents,
(e) Borrower shall either deposit with Lender an amount equal to the Defeasance Deposit, or, at Lender’s request, deliver to Lender the Defeasance Collateral. In connection with the foregoing, Borrower appoints Lender as Borrower’s agent for the purpose of applying the Defeasance Deposit to purchase the Defeasance Collateral,
(f) Borrower shall execute and deliver to Lender all documents reasonably required by Lender (i) in the case of a Full Defeasance, necessary to amend and restate the Note in a principal amount equal to the then outstanding principal balance of the Loan (the “Full Defeased Note”), and (ii) in the case of a Partial Defeasance, to issue with two substitute notes as followsNotes: (A) one promissory note in a principal amount equal to 125% of the Allocated Loan Amount of the Individual Property to be defeased (the “Defeased Note”); and (B) the other promissory note having a principal balance equal to the Allocated Loan Amounts of all Individual Properties (including the Individual Property being defeased) less the amount Defeased portion of the original Note (the “Defeased Note”) and one note having a principal balance equal to the undefeased portion of the original Note (the “Undefeased Note”). The If acceptable to any facilitator of the Defeasance, Lender shall have the right to cross-default the Defeased Note with the Undefeased Note such that a default with respect to the Undefeased Note shall constitute a default under the Defeased Note; provided, however no other cross-default of the Defeased Note and the Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Required Debt Service Paymentbe permitted. Neither a Full Defeased Note nor a Defeased Note The Undefeased Notes may be the subject of any a further defeasance; after a Partial Defeasance in accordance with the terms of this Section 2.1 (the term “Note”, as used in this Section 2.1, being deemed to refer to the Undefeased Note that is the subject of further Defeasance).
(c) At the time of the Defeasance, all references herein and in the other Loan Documents to “Note” Defeased Note shall be deemed assumed by a bankruptcy-remote entity established or designated by the initial Lender hereunder or its designee, to mean the Undefeased Note, unless expressly provided otherwise,
(g) which Borrower shall transfer all of the Defeasance Collateral (a “Defeasance Borrower”). If the Loan is Defeased in part or in full, the right of the initial Lender hereunder or its designee to establish or designate a Defeasance Borrower shall be retained by the initial Lender notwithstanding the sale or transfer of the Loan unless such obligation is specifically assigned to and assumed by the transferee. Such Defeasance Borrower shall execute and deliver to Lender the following items:
(i) a security agreement, an assumption agreement in form and substance satisfying the Prudent Lender Standard, creating a first priority perfected Lien on the Defeasance Deposit and the Defeasance Collateral (the “Security Agreement”),
(ii) for execution by reasonably satisfactory to Lender, a release of each applicable Individual Property being defeased from the lien of the applicable Mortgage in a form appropriate for the jurisdiction in which such Individual Property is located,
(iii) an Officer’s Certificate of Borrower certifying that the requirements set forth in this Section 2.10 have been satisfied including, without limitation, that no Event of Default has occurred Uniform Commercial Code financing statements as may be reasonably requested by Lender and is continuing,
(iv) an opinion legal opinions of counsel in form and substance satisfying reasonably acceptable to Lender that are substantially equivalent to the Prudent Lender Standard stating, among other things, (A) that, the Defeasance Collateral has been duly and validly assigned and opinions delivered to Lender and Lender has a first priority perfected security interest in and Lien on the Defeasance Deposit and a first priority perfected security interest in and Lien on the Defeasance Collateral and the Proceeds thereof and (B) that the subject Partial Defeasance will not adversely affect the status of any REMIC formed in connection with a Secondary Market Transaction, and
(v) such other certificates, documents or instruments as Lender may reasonably request including, without limitation, (A) written confirmation from the relevant Rating Agencies that such Partial Defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable rating on any security issued in connection with any Secondary Market Transaction and (B) a certificate from an Independent certified public accountant certifying that the Defeasance Collateral complies with all of the requirements of this Section 2.10,
(h) In the case of a Partial Defeasance, the Debt Service Coverage Ratio with respect to the Undefeased Note shall be equal to or greater than (i) 1.51:1.00, and (ii) the Debt Service Coverage Ratio with respect to the Loan for the trailing twelve (12) months immediately prior to such Partial Defeasance, and
(i) In the case of a Partial Defeasance, the RevPAR with respect to the Individual Properties securing the Undefeased Note shall be equal to or greater than (i) RevPAR with respect to all of the Individual Properties as of the Closing Date, including new nonconsolidation opinions reasonably satisfactory to Lender and (ii) RevPAR with respect satisfactory to all of the Individual Properties for the trailing twelve (12) months immediately prior to such Partial Defeasance, each as determined in accordance with the Prudent Lender Standard. Upon compliance with the requirements of this Section 2.10, the Individual Property which is the subject of such Full Defeasance or Partial Defeasance shall be released from the lien of the applicable Mortgage, Rating Agencies; and shall thereafter no longer be subject to restrictions on transfer set forth herein. In connection with a defeasance of the Loan, Borrower shall assign to an entity, which entity which shall be a Special-Purpose Entity (the “Successor Obligor”), all of Borrower’s obligations under the Full Defeased Note or Defeased Note, as the case may be, the other Loan Documents and the Security Agreement, together with the pledged Defeasance Collateral. The Successor Obligor shall assume, in a writing or writings satisfying the Prudent Lender Standard, all of Borrower’s obligations under the Full Defeased Note or the Defeased Note, as the case may be, the other Loan Documents and the Security Agreement and, upon such assignment, Borrower shall, except as set forth herein, be relieved of its obligations hereunder. If a Successor Borrower assumes Borrower’s obligations, Lender may require as a condition to such defeasance, such additional legal opinions from Borrower’s or Successor Obligor’s counsel as Lender reasonably deems necessary to confirm the valid creation and authority of the Successor Borrower (including a non-consolidation opinion), the assignment and assumption of the Loan, the Security Agreement and the Defeasance Collateral between Borrower shall deliver such other documents, certificates and legal opinions as Lender shall reasonably request.
(d) Borrower must give Lender and each Rating Agency at least 30 days’ (and not more than 60 days’) prior written notice of any Defeasance under this Section, specifying the date on which the Defeasance is to occur. If such Defeasance is not made on such date (x) Borrower’s notice of Defeasance will be deemed rescinded, and (y) Borrower shall on such date pay to Lender all reasonable losses, actual and documented costs and expenses suffered by Lender as a consequence of such rescission.
(e) Upon satisfaction of the requirements contained in this Section 2.1, Lender will execute and deliver to Borrower such instruments, prepared by Borrower and Successor Borrowerapproved by Lender, and as shall be necessary to release the enforceability of applicable Property or Properties from the assignment documents and Liens of the Loan Documents as or to assign the obligation applicable portion of Successor Borrower. Borrower shall pay all out-of-pocket costs such Liens and expenses incurred by Lender, including Lender’s reasonable attorney’s fees and expenses, incurred in connection with Successor Borrower’s assumption the Defeased portions of the LoanNote to a third party to the extent necessary to avoid the incurrence of mortgage recording taxes. Thereafter “Borrower,” as defined herein, shall exclude the Security Agreement and Borrower that owned the Defeasance Collateral. Nothing in this Section 2.10 shall release Borrower from any liability or obligation relating to any environmental matters arising under Section 5.1(F)Permitted Release Parcel that was theretofore released.
Appears in 1 contract
Samples: Loan Agreement (Parkway, Inc.)